John Prescott: Any judgment about how many houses are needed in the north-east will be considered not only by the proposals—[Hon. Members: "The south-east."] It is the same for the south-east and for the east of England. To be clear, the proposals considered included some parts of the south-east as well as the east of England but, whatever the figures, they will be decided in public consultation. I will then appoint an independent review and it will make judgments about whether there is sufficient transport investment—which I believe there will be—to meet the housing requirements. Let the review make its recommendations, and then I will make a proper judgment about them.
	It is rather curious that the hon. Gentleman calls in aid the regional assemblies just when the Conservatives are recommending in the James review to get rid of them as well as the regional government offices that they set up. Some 3,000 people would be made unemployed and the land of the regional development agencies would be sold off. The good, old James proposals go back to the old formula: more on the dole, fewer public services and the typical boom-and-bust policy of the Tories.

Nick Raynsford: I have a lot of sympathy for the views expressed by my hon. Friend. As he will know, the balance of funding review reported in July last year and concluded that there are strong arguments for shifting the balance of funding towards more local funding, but that depends on the feasibility and desirability of any measures that might be used to achieve it. That is precisely what the Lyons inquiry is looking at, and it expects to report by the end of this year.

Nick Raynsford: In terms of fairness and accountability, when the hon. Lady's party was in power grants to local government were cut year after year and local authorities were faced with the real problem of trying to meet local needs without adequate finance. Since this Government have been in power, the grant to local government has increased by 33 per cent. in real terms, which has enabled councils to budget prudently. If she were really worried about council tax, she would be talking to Conservative councils because they had the unenviable record last year of setting larger increases than Labour councils—5.4 per cent. compared with 4.7 per cent. Labour is leading the way on keeping council tax down.

Phil Hope: My hon. Friend is right. I am delighted to congratulate the staff of Bristol council and its partnership agencies with which they have been working to protect the health and safety of the most vulnerable tenants, who are at the forefront of our drive to improve housing conditions. We would like other local councils to follow the example of authorities such as Bristol in establishing those strong partnerships so that we can protect vulnerable families in high risk housing. Such families would suffer most from the £1 billion cuts to housing budgets that the Opposition would inflict on local authorities, were they ever to get into power.

Clive Betts: I am sure that my hon. Friend would like to identify as an example of good practice the work of Sheffield city council and tenants' representatives in the city in consulting on and then developing and creating the city-wide and area arm's length management organisations, which will certainly improve the city's housing in the next few years and bring it to a decent standard. Will my hon. Friend give an assurance that, as part of the internal review on ALMOs, there will be no reduction in the funding available to ALMOs to create decent homes, and that there will be no attempt to remove the right of ALMO tenants to have their homes remain in the ownership of the city council, which is one of their most important features?

Phil Hope: The Government of course accept that they have inherited a liability in respect of the Grassmoor site. My hon. Friend is aware that the Department for Trade and Industry has agreed to fund a study, which is already under way and will, we hope, be completed around May this year, to update the remediation strategy on that site.

Laurence Robertson: Is the Minister aware of the enormous opposition to that scheme across the country from councils, local people and the fire service itself? Why does he feel that all those people are wrong and that he is right? Will he take into account the circumstances in Gloucestershire, where the fire and rescue service emergency room has recently moved into a new tristar centre? His proposal is not only expensive, but wrong.

Michael Howard: The Prime Minister says—[Interruption.] The Prime Minister says that he does not do deals over his job, but he did a deal over his job over dinner at Granita. He did a deal over dinner at Admiralty house. He is the deals on wheels Prime Minister. No wonder the Chancellor is not a happy eater.
	Now let me tell the Prime Minister why these things matter. The spokesman for senior civil servants has said that
	"Number Ten and the Treasury . . . have . . . conflicting and competing agendas for Government".
	He said that
	"Departments . . . have to try to make sense of this battle".
	He also said:
	"It's not good Government."
	This is something that goes directly to the heart of Government. That is why it is important. So let me ask the Prime Minister again: did he tell the Chancellor that he would stand down? Does he deny it—yes or no?

Tony Blair: On the first point, it is right to pay tribute to all who have been involved in the emergency response to the floods—the fire, ambulance and police services, the local authorities, the Environment Agency, the Scottish Environment Protection Agency, the coast guard, mountain rescue and those involved in the military aspect. We should also thank the voluntary organisations, because they are helping to care for those affected. I offer condolences, I am sure on behalf of the House, to the families of those killed and extend sympathy to those who are experiencing stress and structural damage to their homes. My hon. Friend the Minister for the Environment and Agri-environment will respond to an urgent question in the House on that afterwards.
	On the Africa plan that we intend to put to the G8 this year, the international finance facility is one way, although not the only way, to extend the amount of aid that will be available to Africa. I also entirely agree that good governance and, for example, conflict resolution must form part of the plan that we intend to present.

Tony Blair: My hon. Friend is right on the general point that he makes about the importance of legislation such as the Consumer Credit Bill, which I understand has its Commons Second Reading tomorrow. That is obviously important. There is also an action plan, which we published last July. In the priorities that it sets out for work by consumer credit companies, banks and others, the access to affordable credit and high quality, free debt advice is central. I agree that it is important that the powers that these companies have should be exercised responsibly, and we will do our level best to ensure that they are.

Philip Hammond: In case after case before the courts, local authorities have lost out to Travellers pleading the human rights agenda in defence of unauthorised encampments. Are the Government willing to legislate to stop human rights laws being used to drive a coach and horse through our planning system, as the Leader of the Opposition has pledged a Conservative Government would do?

Pete Wishart: (Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs—

George Foulkes: I congratulate my hon. Friend on reacting so quickly by going to Carlisle immediately after the devastation occurred. I echo what my right hon. Friend the Member for Cunninghame, North (Mr. Wilson) said during Prime Minister's questions: we must pay tribute not just to all the emergency services, which reacted so quickly, but to the electricity and other industries that also responded rapidly.
	There is a danger—we saw it with the tsunami disaster and we are seeing it here again—of imagining that we can deal with such forces of nature, solve every problem and hold back the consequences in Canute style. There is also a danger, and the hon. Member for North Tayside (Pete Wishart) came close to it, as do his party colleagues, of sitting in the comfort—[Interruption.]

Tam Dalyell: May I pay tribute to the work done by the fire and water engineers, who are extremely courageous and, frankly, often very brave in these circumstances? However, the unpalatable and awkward truth is that many of the people affected are either under insured or—heaven help us—not insured at all. Should not the Government hold discussions with the insurance companies about what might be done? Some families face appalling problems because, whether it is their fault or not, they have neglected to arrange insurance. We might think that they should have done that, but they have not.

Elliot Morley: Yes, we meet the Association of British Insurers, the trade body, regularly. I meet them, as do my hon. Friends at the Treasury, who have the lead responsibility in dealing with insurance companies. We have a good relationship with the ABI; there is clearly a range of issues of interest, not least the provision of insurance cover, its availability and cost. We want a strong and robust market for insurance cover so that consumers have a range of choices and can thus choose the best price and the best cover for their circumstances.

Lembit �pik: Two significant rivers, the Clywedog and the Severn, originate in my constituency. Is the Minister aware of an experiment carried out over the past few years to drop the level of the reservoirs, thereby reducing flooding during periods of severe weather in the Severn valley and elsewhere? Would he look at that successful experiment, and consider rolling it out elsewhere? Does the Minister accept that there is no doubt at all that much of the climate change that we are experiencing is a direct consequence of the polluting activities of human beings?

Mr. Kevan Jones, supported by Ms Dari Taylor, Mark Tami, Mr. Liam Byrne, Iain Wright, Jon Cruddas, Helen Jones, Ann McKechin, Mr. George Howarth, Mrs. Joan Humble, Mr. Stephen Pound and Mr. Frank Roy, presented a Bill to amend the Mobile Telephones (Re-programming) Act 2002: And the same was read the First time; and ordered to be read a Second time on Friday 18 April, and to be printed [Bill 25].

Dawn Primarolo: I beg to move, That the Bill be now read a Second time.
	The Bill is a short and straightforward measure consisting of seven clauses. None the less, it is a significant milestone in the Government's commitment to removing the financial barriers to young people staying in education or training after the age of 16, helping them to gain the skills and qualifications that they need to succeed in the modern global economy.
	I would like to start by thanking the many organisations that have contributed to our consultation on the Government's review of financial support for 16 to 19-year-olds. Their views and evidence have been invaluable in informing the development of our proposals, including this Bill, which is an important first step. We have also been keen to involve young people and parents directly in the policy making that affects them.
	Last September, I took part in a consultation event with young people organised by the National Council for Voluntary Youth Services. I was very impressed by the dedication and insightful comments of the young people whom I met. Their ideas and suggestions are now shaping the future of financial support for 16 to 19-year-olds. Indeed, Centrepoint arranged for me to have a very long meeting with a number of young people, who again demonstrated at every point their sensitivities, understanding and determination to have access to education and training to better their opportunities in adult life.
	In short, the Bill will enable the Government to lay regulations extending child benefit to new groups of learners aged 16 and over. The House may find it helpful if I explain briefly the background of the steps leading up to the Bill so that hon. Members are able to understand its purpose in the context of the Government's skills agenda and our overriding commitment to build a strong economy and a fair society in which there are opportunities for all.
	The Government's stable macro-economic framework has already contributed to lower levels of unemployment and record levels of employment. However, we know that to continue to thrive in the modern global economy and to deliver social justice to allbecoming both a fairer and more prosperous societywe need to improve the skills and fulfil the potential of all our young people and adults. Skills help our businesses and public services to achieve greater efficiency, innovation and excellence and they help individuals to gain employment opportunities and achieve their ambitions for themselves, their families and their communities.
	We all know that skills matter, but we also know that the United Kingdom educational system has unfortunately suffered from historical underachievement. Although we perform strongly in higher education and have a large number of highly skilled workers compared with other countries, the historic failure to invest in training and education until recently has led to major shortfalls in terms of the intermediate skills that we need to secure sustainable employment and opportunities for all. As a result, far too many young people and adults are prevented by their lack of skills from getting secure, well paid jobs and all the social and personal benefits that go with them.
	About 7.8 million working-age people in the United Kingdom do not have the level 2 qualificationsthe equivalent of five GCSE A to C gradesthat are needed as a foundation for many careers. This failure is particularly apparent when we compare ourselves with our key competitors. Some 33 per cent. of the United Kingdom work force have low skills compared with 19 per cent. in Germany and 15 per cent. in the United States. In fact, we have the highest proportion of unskilled workers in any major European Union country.
	In the Chancellor of the Exchequer's pre-Budget report statement, he set out the steps that the Government are taking to close Britain's skills gap. Part of this strategy involves ensuring that every adult who has missed out at school will have the funds and the opportunity through time off work, free training and help from employers to acquire skills, starting with a first level 2 qualification. Our commitment to deliver that was underlined by the announcements to roll out the national employer training programme and a pilot of a new learning allowance for benefit claimants, building on the success of the new deal for skills launched in the Budget of 2004.
	The Government know, however, that these measures are not enough on their own. In order to secure greater productivity, flexibility and fairness in the United Kingdom economy in the long term, we know that we must ensure that, in future, all young people reach adulthood equipped with the skills that they need to succeed in the economy. Too many adults fail to reach their potential when young. Despite significant increases in the number of young people participating in education and training after the age of 16, a quarter of 15 to 19-year-olds are still not in formal education.
	The United Kingdom compares unfavourably in this regard internationally. We currently lie 25th out of the 30 Organisation for Economic Co-operation and Development countries for participation in education at the age of 17. This situation did not occur overnightit is the result of years and decades of failure to invest in educationand it cannot be put right overnight. However, the Government are committed to increasing the flow of skills into the labour market by ensuring that all young people can reach the age of 19 ready for skilled employment or higher education. Our long-term ambition is that by 2015, United Kingdom staying-on rates after 16 will move from one of the lowest in the OECD to one of the highest. Since 1997, we have been putting in place the effective strategy to achieve this ambition, taking an holistic approach that brings together three different areas of policy with the aim of setting clear expectations for all young people that they should continue in learning beyond 16whether in school, college or the work place.
	First, we are reforming the curriculum structure for young people in England to provide more coherence, choice and flexibility, including by raising the quality and profile of the vocational route. Much has already been done to improve the quality and quantity of training places. With the expansion and reform of the apprenticeship programme, we are now able to offer a ladder of opportunity from basic to advanced skill levels.
	A record number of young people are currently engaged in Government-supported training, with more than 250,000 in England alone gaining skills, experience and qualifications in thousands of businesses. The Government have welcomed the proposals of the working group on 14 to 19 reform, which was led by Mike Tomlinson and recommended the development of a single curriculum structure with the aim of giving academic and vocational qualifications greater parity. We will shortly set out our detailed response to those proposals in the form of a White Paper.
	Our second strand of policy is designed to underpin those curriculum reforms by strengthening the advice, guidance and support offered to young people to ensure that they are able to make informed choices about the range of learning options and opportunities that are now available to them. Connexions partnerships and the devolved careers services are playing a vital role in that area and reducing the number of young people outside work, training and education. I pay tribute to the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Bury, South (Mr. Lewis), for working tirelessly in his Department to bring those benefits to our young people.

John Bercow: Much of what the Paymaster General has said has been unexceptionable and I acknowledge that there is a good deal to be said for the Bill. However, she used the term missed out in relation to people who did not get what they should have had, or had hoped to receive, at school, and for whom provision must be made thereafter. I am not making a partisan point because this a matter of great national concern, but does she know why the proportion of companies in recent business surveys saying that the three R's are not good enough and that we must provide remedial training is going up, not down?

Dawn Primarolo: The hon. Gentleman is right to pinpoint the fact that informed choice is necessary as one of the pressure points. Connexions plays a crucial role, but that must be enhanced and developed. I know that my hon. Friend the Under-Secretary is working on that, and the youth Green Paper will need to build on it. The hon. Member for Banbury (Tony Baldry) rightly points out not only that opportunities must be available, but that young people must know that they are available and be able to decide which are most appropriate so that they can build on their potential.

Judy Mallaber: rose

Jonathan R Shaw: rose

Dawn Primarolo: I give way first to my hon. Friend the Member for Amber Valley (Judy Mallaber), and then of course I shall come to my hon. Friend the Member for Chatham and Aylesford (Jonathan Shaw).

Judy Mallaber: Following on from the discussion initiated by the hon. Member for Buckingham (Mr. Bercow), I can add that Amber Valley has an incredible positive programme running from early years through to a 16-to-19 programme for those who are not in education, employment, or training at that age. We also have a sports development programme, to re-engage children from an early age right through. How restrictive will the criteria for who will qualify for the different types of training and the courses be? I want to ensure that the 16-to-19 programme, which might not necessarily lead to a formal qualification, but is very successful, will fall within the parameters of the Bill.

Jonathan R Shaw: I would like to following up the point made by the hon. Member for Banbury (Tony Baldry). The learning and skills council, the Connexions service and the local education authority in my area have organised the offer of post-16 education and training as part of the strategic area review. Does my right hon. Friend agree that it is vital that information about that, and the benefits available to all young people, is disseminated? Similar areas have different rates of success, so will she and the Department for Education and Skills examine best practice in increasing in the use of post-16 provision? This is a matter of national importance, so we must keep a microscope on what is happening locally.

John Bercow: I am grateful; the Paymaster General's generosity is exemplary. The Bill is short, but I hope that the right hon. Lady will understand when I say that my brow furrowed when she referred to the regulations that are to come. Will they be subject to the negative procedure of the House, or to its affirmative counterpart?

Rob Marris: I shall return in a while to the out-to-lunch remarks about Granita by the hon. Member for Chichester (Mr. Tyrie).
	I want to put the Bill, which I very much welcome, into an historical context. Many of my generation, and those of others in the Chamber today, were scarred politically by our communities' experience of the 11-plus and the idea that, at age 11, one was either going to become a manual worker or an academic, A-level type with a higher certificate, as it used to be in England. We worked hard politically to overcome that bifurcation at age 11 with our support for comprehensive education and for encouraging young people into higher education. The pendulum has swung too far and what many of us, including me, overlooked, is that training is necessary for many manual jobs and that we should be looking for people divided off at age 11 into the non-academic stream to be able to get back, as adults, into the academic stream. That is what the Open university, one of the jewels in the crown of Harold Wilson's 1966 to 1970 Labour Government, was about. What has only just started to happen in the other direction is that, in the past three or four years, we have been looking at ways for those who were on the academic track to take a non-academic or less academic route to education and training.
	Also part of the historical context is the fact that we have 2 million more people in work and the fact that in certain areas of the country there are huge skills shortages. Some of that is being addressed by imported labour, which in some cases will be temporaryfor example, the use of Fillipino nurses in the health services. However, the bulk of the problem should and will be solved by training home-grown labour.
	The support that we as a society, the previous Government and this Government provided for those entering higher education was entirely worth while, but again the pendulum swung too far. Those who were continuing with training but were not in higher education were second-class citizens when it came to social and Government support for their endeavours. That is true of young people as well as mature students. I very much welcome the 14 to 19 strategy for increased curriculum flexibility that has come from the Tomlinson report. The Bill fits neatly with that as additional financial support for those who, for example, have had disrupted schooling and go on to do at 19 or 20 what some of their peers might have done at 17 or 18. It is very welcome and it is overdue.
	You will know, Madam Deputy Speaker, of the huge skills shortages in your area, which is the same as minethe black countryand of what the Learning and Skills Council and Connexions have been doing. We are starting to change that, but it will take a long time. It is particularly relevant for an industrial area such as the west midlands. Not so much down in the southern part, where you are, Madam Deputy Speaker, but where I am in Wolverhampton, there is a history of people training on the job but not getting formal qualifications. Although that is important, we need to move as a society towards more formal qualifications as well as training on the job that leads to qualifications. The Bill dovetails nicely with that, and it will be of tremendous benefit to our region and sub-region.
	The hon. Member for Chichester rightly mentioned the complexity of the Bill. He talked about the various ways in which young people could access not only training but financial support, whether child benefit or education maintenance allowance. He mentioned the Bridging the Gap report, which refers to slightly different figures from his but reaches exactly the same the end point. It says:
	Money is paid through at least eight different agencies (with a ninth heavily involved) on behalf of two Government Departments.
	That was also mentioned by the hon. Member for Banbury (Tony Baldry) when he talked about how young people would find out about this support and it is what I found in my preparatory research for the debate. The aims of the Bill are twofoldto provide state support for trainees who are unwaged on training courses and for those who are, to put it in shorthand, at further education colleges and carrying on with courses until the age of 20 or so.
	That is a simple and laudable goal; the complexity lies in the delivery mechanism. I caution the hon. Member for Chichester as regards talking about simplicity. Simplicity is one of those things, like cutting red tape, that is terribly attractive to Members all over the House, who hope that it will be attractive to those whose votes they seek to garner. As my hon. and learned Friend the Member for Redcar (Vera Baird)a fellow-member of the Work and Pensions Committee who will speak laterand I know, the Child Support Agency is a classic example. Parliament decided to simplify CS1, the first system that was brought in, and introduced CS2a system based on 15 per cent. for the first child, 20 per cent. for the second child, and 25 per cent. for three or more children in terms of the non-resident parent's obligation to pay. That is a simple formula that is understandable to the manit usually is a manin the street, but the complexities of putting it into effect have bedevilled the Department for Work and Pensions and the Child Support Agency. What appeared to be simple on paper became terribly complex when one tried to put it into operation. The reason for that is simplepeople lead complex lives. If we as a House try to simplify matters too much, it may well imperil support for children and for young people engaged in education and training who will be covered by the Bill potentially from the ages of 16 to 21.
	The Bill is a step forward because it will start to address the skewed choices that some young people have made through force of financial circumstance. Paragraph 28 of the regulatory impact assessment states:
	One possible positive effect is that training providers may find they are on a level playing field with FE colleges because young people's decisions are not being skewed by differentials in financial support between the two learning routes.
	It is very important that young people have a more level playing field of choice.
	The costs have been adverted to. Government spending is massive. One should never be cavalier with taxpayers' money, but the Bill is a very positive step. As set out in the regulatory impact assessmentthere will of course be changed behaviour, as the hon. Member for Chichester saidthe cost of the 80,000 unwaged training positions will be 105 million per year. In fact, one hopes that there will be some change in behaviour and that more young people who are not on the training contracts will engage in them, thereby helping to address skills shortages. Relative to Government spending, that cost seems small. If the number of positions were to double from 80,000 to 160,000, and the per capita costs were roughly the same, the figure would rise to 210 million, with tremendous social benefit in terms of those young people's self-respect and dignity. There will be positive benefits for society when those young people come through the pipeline having been trained.
	The cost of paying for FE placesagain that is shorthand, but they are the main focusis 65 million a year up to the age of 20 and 75 million up to the age of 21, with some attendant costs that are not mentioned.

David Laws: We join the hon. Member for Chichester (Mr. Tyrie) in welcoming the Bill, especially two specific provisions: first, extending child benefit and the child tax credit to unwaged trainees and, secondly, allowing young people who reach the age of 19 and are on a course to continue on it with the benefits that they received previously. We believe that both changes are sensible and we support the broad thrust of the Government's strategy to try to ensure a coherent, simple and helpful system of support for young people.
	The hon. Member for Wolverhampton, South-West (Rob Marris) mentioned one reason for the Bill: to ensure a fair and level playing field between young people in training and those in formal education. That is sensible and clearly reflects some of the changes that the Department for Education and Skills is currently considering. The Bill has to be viewed against the background of the Government's attempts, for example, through the education maintenance allowance, to encourage young people to develop their skills and to help those young people who would otherwise be under pressure to leave education and training and go straight to work. We welcome the opportunity for those people to continue in education and training.
	The hon. Member for Chichester made several points about the Treasury's involvement, on which it is worth commenting at the outset. We welcome the strategic interest that the Treasury has shown since 1997 in economic and social issues. The Red Books have got larger over the years. Although those of us who read them note their increasing cost and length, we also note the broad strategic economic and social set of objectives that the Government present, steered by the Treasury, either because of the Granita dinner or for some other reason. It is important for any Government to have a set of broad economic and social objectives. They should be pursued by some part of Governmentthe Treasury or perhaps the Cabinet Office in future. The Cabinet Office would have to do a reasonably good job to co-ordinate them and create a sense of coherence in the way that the Treasury has done since 1997.
	Those relatively complimentary comments come with a reservation that, although the Treasury has a useful co-ordinating role, I am not sure whether it is sensible for it to be seen to lead on matters that would normally be the domain of individual Departments. No doubt all hon. Members who speak in the debate, including from the Front Benches, will be well briefed but many of the detailed and substantive provisions in the Bill are matters more for the Departments for Education and Skills and for Work and Pensions. The measure would benefit from not only their involvement but their leading on the issues. It would also benefit from the Treasury playing not only its part in the broad strategic direction of Government policy but a policing role for large amounts of public expenditure. The costs may be clear but the benefits are not.
	The Bill is small and uncontentious but important. First, it deals with two substantive matters that affect approximately 160,000 young people. It is a worthwhile measure for that reason. Secondly, it is clearly part of a much broader and longer-term strategy to simplify and rationalise the system of support for children, young people and young adults. The hon. Member for Wolverhampton, South-West made the sensible point that having 19, 20 and 21-year-olds on child benefit appears bizarre and eccentric. I suspect that when people outside the House realise the position, they will find it eccentric. It will lead to even more confusion of the sort to which the hon. Member for Chichester referred. That is amplified by the sketch and graph in the paper that the Government issued in March 2004 and that attempts to set out in visual form the existing systems of support for young people. It is extremely challenging. I hope that the Government will take the opportunity in the longer term to rationalise and simplify support for young people. I hope that, in future, we will not have to rely on child benefit as the means of support for young people who have clearly entered their adult years.

David Laws: The hon. Gentleman makes an important point. Where there is already a breakdown in the relationship between the young person and the parent, a different category of benefit entitlement might apply anyway and they would not be covered by the child benefit provisions. However, there will be many marginal cases, and this should be one of the issues that we consider very carefully in Committee.
	The final reason why this is an important Bill is that although it is short and seems modest, it involves quite a lot of public expenditure. The total cost, as the hon. Member for Wolverhampton, South-West said, is about 170 million a year, or 6 for every taxpaying household in the country. That is not a huge amount, but it is not a modest amount either, and we should certainly subject that sort of expenditure to a great deal of scrutiny.
	I want to touch on four issues today. The first is the cost and benefit calculations that have to be made, and the extent to which they have been made in the regulatory impact assessment. Secondly, I want briefly to look at any problems likely to arise when changes are made to the entitlement of unwaged trainees. Thirdly, I want to look at the way in which the changes will affect young people who are still in education or training at the age of 19. Fourthly, I want to make a couple of brief comments about the Government's future strategy in these areas.
	I want to start by joining the hon. Member for Chichester in expressing surprise at the paucity of information in the initial regulatory impact assessment, and to express my relief that a partial supplementary assessment was published recently. There was a wonderful letter at the back of the initial regulatory impact assessment, which was no doubt among the many things on the Paymaster General's desk that she had to sign at the end of a busy day. She had to put her signature beneath this sentence:
	I have read the regulatory impact assessment and I am satisfied that the benefits justify the costs.
	I do not know how she came to that conclusion by reading the regulatory impact assessment because it is extremely brief and extremely unhelpful in terms of assessing both the benefits and the costs.
	In fairness to the Treasury, we have had the supplementary partial regulatory impact assessment, which is pretty clear on the costs. Some issues might arise in relation to the costs based on our assumptions about what individuals will do in responding to these changes, but the cost side of the equation is pretty clear, as I am afraid it usually is when any Government introduce a change in policy. We always know what it will cost, and those cost estimates tend to be reasonably reliable.
	It is far less clear what kind of benefits we can achieve through these changes. Some might be achieved simply through creating a fairer system and having a more socially acceptable set of benefit entitlements. That was the implication of the comment made by the hon. Member for Wolverhampton, South-West when I asked him whether he would still be in favour of the two changes even if there were no economic benefit. It is quite possible that we would be in favour of them for other reasons, although I doubt that that would be the case in regard to educational maintenance allowances. If we had spent additional money on those and there had been no increase in the staying-on rate, I suspect that few of us would think that it had been money well spent.There are, therefore, reasons for us to look very closely at the economic benefits of the proposals.
	This area of public expenditure is competing with every other one for a slice of the national cake and for available expenditure, which is likely to be quite scarce after the next election, given the state of the public finances. If we look at the section of the regulatory impact assessment that discusses benefits, which the hon. Member for Chichester was generous enough not to read out earlier, we find that it states:
	The benefits of the Bill are two fold. Firstly it enables implementation of the reforms to the definition of a child to address two key anomalies.
	It then sets out the anomalies that are dealt with in the Bill. It goes on:
	Secondly it introduces a degree of flexibility to respond to curriculum changes in England expected to flow from the 1419 working group, chaired by Mike Tomlinson.
	In other words, all that the section on benefits says is that the benefits are what the Bill does, and that it is going to introduce a degree of flexibility in relation to changes that we do not yet know will actually take place, but that are simply expected to take place. On that basis, the Paymaster General has signed a piece of paper stating that she is satisfied that the benefits justify the costs. I am glad that she did not say that the benefits exceeded the costs, because it would be very difficult to establish that from the information that we have. This is an important issue, however.
	The hon. Member for Chichester alluded earlier to some of the estimates that we would expect the Treasury to have made in order to come to a reasonable monetary estimate of the benefit of this legislation. The Treasury must have made some sort of assessment of the effect of the extension of child benefit and the child tax credit to unwaged trainees. Presumably, it could have an impact in two ways. First, it could encourage individuals who would otherwise have gone into paid employment to go into unpaid employment. That could have a significant cost to the Exchequer. Secondly, it is quite possible, as the Government have acknowledged, that it might act as an incentive to draw people out of formal education into unwaged training, which could end up being less expensivein that narrow sensefor the Government.
	However, we are left with no sense of the estimate that the Government have made of the effect of these changes. Without that, we have no sense of what the Government would consider to be a success or a failure in terms of the effects of these changes on people's behaviour. If we are to know how successful the provisions have been, and whether the extent of the incentives is sufficient, we need to know what the Government expect. I hope that the Economic Secretary will be able to say more about that later.

David Laws: The hon. Gentleman makes a good point, and it is made stronger by the fact that it is the Treasury that should be acting to exert discipline in these circumstances. However, if the Treasury is seen to be the lead Department, it is much more difficult for it to enforce a degree of rigour in regard to the costs and benefits.
	The costs and benefits are also relevant to any incentives that might be created by the changes for people to extend their courses. The Government have expressed their concern that there might be an incentive for people who have turned 19 to carry on their courses for longer. This is not an area in which I claim to have expertiseinput from colleagues from the Department for Work and Pensions and the Department for Education and Skills would be useful here. Will there also be an incentive for employers to switch from having young people in training on a waged basis to doing so on an unwaged basis in order to exploit the changes in benefit entitlements? The Government have suggested in some of their comments in the regulatory impact assessment that they are concerned about that, and there are allusions to the need to deal with the issue. However, we are given no sense of how they intend to do so. The effects that the changes will have in regard to child benefit and child tax credit also relate to those people who stay in education beyond the age of 19. We need to know what effect the Government expect that to have.
	It would also be helpful if the Economic Secretary could clarify whether the costs of the Bill have been built in to the existing public expenditure estimates, or whether the Chancellor will need to make an additional provision for this expenditure in the next Budget. In other words, is this already in the Treasury's public expenditure plans, or will they have to be increased to take account of these provisions?
	We need to consider a number of issues relating to the substantive non-cost issues resulting from the two changes. The first category relates to the changes in regard to unwaged trainees. The Paymaster General said earlier that she believed that all the 80,000 people currently in unwaged trainingthat was the figure as at September 2004would receive child benefit and child tax credit under the changes. That is not the impression that I get when I read sections 9 and 10 of the supplementary partial regulatory impact assessment, as it seems that the Government have had to make a judgment about how they extend this entitlement in practice, and how they define and seek to regulate the category of people who are counted as unwaged and in training.
	The Government appear to have had two different options: one was to extend those entitlements to all unwaged trainees, and the other was to try to come up with some definition. I think that the definition that the Government have come up with is that those benefits will be extended to
	those who do not have a contract of employment on Government Supported Training programmes.
	Section 9 of the supplementary regulatory impact assessment goes on to say that the Government
	will do this by naming the relevant programmes of Government Supported Training in the new regulations.
	I am therefore dubiousI admit that the Paymaster General said that she would come back to me on thisabout whether her comment that all 80,000 individuals on unwaged training would be covered is likely to be realised in practice. I suspect that a small group of people will be missed out, but without the expertise in that area I am unable to speculate on how large that group may be. I hope that the Economic Secretary may be able to comment on that later and tell us whether any groups might otherwise miss out.

David Laws: I am grateful to the hon. Gentleman for making that point. That is not how I read it. My reading is that that cost estimate of 105 million is based on the conditions imposed in paragraph 9, which relate specifically to particular Government supported training programmes that will be spelled out. I think that that is an attempt by the Government to make sure that there is not abuse of those entitlements by employers or others who make bogus claims about people on unwaged training programmes. I fear that some people may be missing out, perhaps understandably, as the Government want to make sure that it is policed effectively, but it would be useful to know a bit more about it.

Andrew Tyrie: The hon. Gentleman is on to a strong point, which I considered making myself. The point was made to me by the Prince's Trust, whose letter I have in front of me. It strongly urged clarification on this point, and specifically wanted to know what is meant by Government supported schemes, and whether voluntary work, work experience and other more informal forms of training will be ineligible.

David Laws: I am grateful to the hon. Gentleman for reinforcing that point, which seems to indicate that it may be useful for the Economic Secretary to clarify that issue today.
	My other concern is that there may be employer incentives to switch between waged and unwaged training, which I mentioned earlier. The Government seem to share that concern, because in the initial regulatory impact assessment, in paragraphs 20 and 21, they set out that there might be some problems in that area. Paragraph 21 says specifically that devolved organisations, with responsibility for securing the progression of trainees from unwaged to waged status, may have to bring in new accountability arrangements to ensure that no adverse impacts or unintended consequences flow from treating unwaged Government supported training more generously. I would be grateful if the Economic Secretary could comment on what proposals there may be to make sure that there is no abuse or adverse impacts.
	Finally, Barnardo's has made some useful representations. It is concerned including on the issue of unwaged traineesabout whether the proposals will reach the underachieving and hard-to-reach group of young people with whom it must often deal, who do not always fit into the neat packages in terms of behaviour, work patterns and benefit entitlements, that the Government, and all Governments, would like. The Barnardo's briefing, which many of us will have received before today's debate, states:
	The aim of the new financial support package is to encourage more young people into training or education but it is difficult to see how a measure that 'rewards' the family rather than the individual young person will assist training programmes to recruit under achieving or hard to reach young people.
	That touches on the argument that the hon. Member for Wolverhampton, South-West also made earlier. I would be grateful if the Economic Secretary could comment on that, too.
	On extending the benefit entitlements and child tax credit entitlement to those who reach the age of 19 and over, we support the change, which seems entirely sensible. Clearly, there are risks of wilful or passive abuse, and the Government's initial suggestion that the cut-off would be raised only to 20 rather than higher seems sensible. The hon. Member for Wolverhampton, South-West also pointed out the sheer oddity of potentially extending child benefit to 20 and 21-year-olds and he is absolutely right that we should hope that that is not the long-term mechanism that the Government intend to use to get help to those young people. Fortunately, we understand that the Government are engaged in a much more far-ranging inquiry into support for young people in future, which will be designed to rationalise all that. I do not imagine that the Government will be considering child benefit to support people in those circumstances in future. If the Economic Secretary could clarify that it would be useful, and it might also address the concerns of the hon. Member for Wolverhampton, South-West about parents getting involved, even though the young people concerned have become adults under UK law.
	Barnardo's also makes a very effective point about hard-to-reach young people and the age 19 cut-off. Its briefing says that
	from our own experience we know that there are young people who, because of their life circumstances, do not access training until later and require a longer period of training before they are fully ready to move into employment . . . If the Child Benefit and Tax Credit extensions are not to apply to themand we acknowledge the incongruity of Child benefits for 21 year oldsthen we would wish to see some other sort of continuing financial support for this group of young people.
	That reinforces the comments made by the hon. Member for Wolverhampton, South-West and the need for us eventually to move beyond reliance on child benefit in this area.
	Those are the issues that are specifically relevant to this Bill, with which I hope the Economic Secretary will deal. It is also worth making a couple of points about the Government's wider strategy, because this Bill is something of a milestone along the way to a new system of support for young people. We ought to be thinking about what we are seeking to achieve in that new system.
	There is a degree of ambiguity in the Government's strategy in relation to what they are seeking to achieve. A useful paper came out earlier this year, Supporting Young People to Achieve, which was sponsored by the Treasury, the Department for Work and Pensions and the Department for Education and Skills. On page 34, it states:
	As well as providing a stable bridge of income between activities, support paid at the same level irrespective of activities would not distort choices.
	The argument is that the Government would put in place a system of support for young people in which choices between different elements of education and training would not be distorted by economic incentives and the way in which young people are supported. That comes back to the level playing field argument and the reasons for extending benefits to unwaged trainees. If we read on, the next paragraph states:
	Financial incentives would influence young people's behaviour in several ways. First the additional weekly amount payable direct to the young person would provide an incentive for them to progress into learning.
	There we come to the other part of the Government's agenda, which is not really to have a simple level playing field, but to try to tackle some of the problems to which the hon. Member for Wolverhampton, South-West alluded earlierthe inability of many young people to stay on in education and training at age 16 or 17 because of economic pressures to go into work and earn money. That is causing the Government not to create a level playing field, but to create certain incentives that are deliberately designed to encourage people to stay in education and training. That may be a very good thing, but it is not the same as a level playing field. It also raises a series of problems in terms of Government policywhich brings us back full circle to the issue with which the hon. Member for Chichester began, namely, costs and benefits.
	If the Government are going to spend a lot of money, they must be very cautious. They must ensure that spending that scarce money actually does change behaviour, rather than simply leading to the deadweight costs that we spoke of earlier. The incentives that the Government implement may not always achieve that balance between costs and benefits. Moreover, in making these changes the Government may, as Barnardo's suggests, impose conditions that will not be easily met by the most vulnerable in society.
	There are a number of concrete issues on which we need reassurance from the Governmentnot just the issue of the cost-benefit balance, but some of the practicalities involved in the Bill's implementation. There are far bigger issues relating to the Government's strategy, with which we will deal on another occasion.

Liam Byrne: I am grateful for the opportunity to speak in this important debate. It is important because it is about young peoplethe people who will inspire us and take our country, our communities and our economy in new directions during this century. They are the young people who, I hope, will not just reinvent the country, but support us in what I trust will be a long and happy retirement.
	The fact is, however, that many young people do not receive the credit they deserve. Sometimes our communities blame them for many of society's problems; sometimes, indeed, they are afraid of them. Nevertheless, our young people are not just an equal part of society butas President Kennedy once put itthe gold reserve of any nation. They are the source of our future wealth and well-being.
	I came to understand that vividly last Friday, when I was joined at Shard End community centre by the chief constable of West Midlands police, Paul Scott-Leea remarkable public servant in his own right, who has served the west midlands extremely well. He joined me for a cup of coffee and a talk with local residents about antisocial behaviour. It was a feisty meeting, as such meetings often are, but Mr. Scott-Lee made a simple and powerful point: he said that as a community, we must take care never to demonise our young people. It is true that some young people will always cause problems for others, just as many old people will. I have dealt with enough nuisance neighbours in Hodge Hill to know that the middle-aged are sometimes just as big a problem as the young.
	I have to say that when I first heard Paul Scott-Lee express his views I was sceptical, but on reflection I realise that he was right. We should remember that young people can be inspirational too. We need only think of the way in which Amir Khan captivated a nation at the Olympics; we need only think of young Ms MacArthur battling her way around the southern oceans at this very moment. Indeed, this country once appointed someone in his early 20s as Prime Minister. Young people in history and today have helped to make the country great, and it is young people of genius and spirit who will power it to a greater future.
	Everyone who will work in the labour market of 2020 is now alive, yet that world of 2020 will be very different from the world of today. First, our young people will have to support rather more senior citizens. By 2020, 30 per cent. of the UK population will be over 60, up from 20 per cent. today. Today the over-65s constitute 24 per cent. of the working population; by 2025 that will rise to 33 per cent., and by 2050 it will rise to nearly 40 per cent.
	Secondly, it will fall to our young people to rise to the challenge of reinventing the way in which our world works. We can see clearly some of what will happen in the future when we reflect on what has happened over the past 20 years. Today, a throwaway musical birthday card has more computing power than the mainframe computer of a couple of decades ago. In 2020, computers will be 4,000 times as powerful as they are today. Nowadays, an estimated 10 to 20 new medicines resulting from biotechnology are launched every year. By 2015, genetic therapy will treat 30 per cent. of life-threatening diseases with a genetic root. All those new possibilities will change the way our country looks, and will power an economy that by 2020 will be 50 per cent. bigger than it is today. It is our young people who will drive those changes.
	We will all have different stories about what that means in our constituencies. I know what it means in Hodge Hill. I recently visited Hodge Hill mixed school, where the head teacher, Elaine Brown, rightly talked proudly of the transformation in the school's results over the past year. She introduced me to some of the school's outstanding graduates. Once upon a time, they would have left school for unemployment, or worse; now, thanks to this Government's reforms over the past seven years, they are ambitious to stay in education, and financially equipped to do so.
	All those young people had one thing in common: an ambition to leave school and go on investing in themselvesworking hard not just for themselves, but for their families and communities. They were, quite frankly, an inspiration. In a way, the Bill is about how we as a country can support people like them as they face the possibilities of tomorrow. That is of particular concern to many of us in Hodge Hill, because we have one of the lowest post-16 participation rates in education, and consequently one of the lowest rates for participation in higher education. Children and young people are now very well served by many of the schools in my constituency, and by many of the local further education institutionsorganisations such as City college, blessed by great public servants such as Kate Morris, who retires today after a lifetime of service.
	Nevertheless, the country confronts two problems. How can we create an economy that is healthy, but in which each of us has an equal chance to become wealthy? To achieve that goal we must not just improve our national productivity, but ensure a more equal distribution of skills. In the past few years, we have made great strides in transforming productivity. We are now as productive as Germany, and we are fast catching up with France. That is due in no small measure to our national investment in skills. In 1981, 7.8 million workers were without qualifications; now 90 per cent. have formal qualifications. Today 28 per cent. of the work force are educated to NVQ level 4 and above, an increase of 133 per cent. in 20 years. Seventy per cent. of those aged between 25 and 64 have had a secondary education, and half those between 16 and 18 are in full-time education or training, compared to just one third in 1985.
	That is a pattern that we must sustain and improve if we are to stay ahead as a nation. In the years to come our economy will need reskilling, and reskilling again. In 1980 almost no one predicted the advent of the personal computer, and in 1990 no one predicted the rise of the internet; yet today information technology skills are judged essential by every employer. If we are to accelerate the pace of investment in productivity and create real opportunities for all our young people to share in the wealth of tomorrow, we have a long way to go in terms of investing in skills, as my right hon. Friend the Paymaster General explained so eloquently.
	Today, the single most important reason for economic inactivity is a lack of education and training. Our intermediate skills still do not compare well with those of our competitors. Indeed, just over one third of the UK work force have reached NVQ level 3 or equivalent, whereas three quarters of the German work force have done so. That is why the Bill is so welcome to the 7,500 young people in Hodge Hill. It provides nothing short of a 40 per cent. pay rise for those of our young people who seek a training-based option at 16.
	Thanks to this Government, students from poor backgrounds who want to stay on at school can now access up to 30 a week in education maintenance allowancea payment that does nothing to affect access to a range of other benefits. Yet those who take up a training allowance might receive as little as 40 a week, with their access to supplementary benefits disallowed. Given that income support currently stands at 43.25 a week, we can see that any such person, no matter what their ability or ambition to learn, would face a very difficult decision if they were experiencing hard times. We must change that. We must make sure that investing in oneself has a pay-off. We have to ensure that the right benefits are available to our young people, and maximise their chances of living a life off benefits.
	Many Members from all parts of the House share a simple ambition for this country: that if we can find a shred of talent or potential in any of our young people, we should nurture it and invest in it, and help it to grow into something of pride and value not just to one family but to a whole community, and not just for a fleeting moment but for a lifetime. That is surely a worthy ambition for this House, which is why the Bill deserves unanimous support.

Tony Baldry: The hon. Member for Birmingham, Hodge Hill (Mr. Byrne) has made a thoughtful and interesting speech, and none of us would dissent from anything that he said. Many of us enjoyed walking round his constituency last year; getting to know a part of Birmingham that we had not hitherto known was an interesting experience. In 22 years as a Member of the House, this is the first time that I have taken part in a debate, other than Budget debates, to which Treasury Ministers are replying. Indeed, the Whips suggested to me that participating this afternoon would widen my horizons.
	I want to make only three points, and I hope not to bore the House in doing so. The first echoes the comments of the hon. Member for Birmingham, Hodge Hill. I am fortunate enough, in my work with the International Development Committee, to travel the world fairly extensively. We often think of certain places as being poor, but if I were king for a day, I would try to ensure that as many people as possible visited China. There are cities and towns growing up in China of which we have not heard, and which are as large as, if not larger than, cities such as Coventry and Bristol. China's growth and its skills capacity are phenomenal, and it will challenge the competitiveness of Europe and the rest of the developed world in a way that UK and European business has not even begun to grasp. We think of countries such as India as being poor, and some parts of it indeed are. However, places such as Bangalore are incredibly successful and high-tech. If we do not ensure that our young people acquire the maximum number of skills, Britain and Europe will fall behind; it is as simple as that. Unskilled and unqualified people will undoubtedly become unemployed.
	My second point echoes the one that I made in an intervention. The Sure Start scheme is excellent, but perhaps we also need a firm finish scheme. We need an undertaking from the Department for Education and Skills that every youngster, at some stage in their school education, will have an individual interview with someone from Connexions who can go through all the options available to them. It is human nature for schools to want to encourage the maximum staying-on rate. Given the current capitation formula, the more people who stay on, the more money schools get, so they tend not to explain to youngsters that other opportunities exist, such as attending local colleges and doing NVQs, BTECs, national diplomas and various other training. I simply am not confident that such possibilities are pointed out to them. To be honest, nor am I confident that Connexions is even connected in my part of the world. The learning and skills council is an element of the machinery of government that still needs to be fitted in.
	On paper, having a uniform and straightforward maintenance and support system for youngsters is a brilliant idea, but parents have got to be able to understand it. I hope that the Inland Revenue, perhaps with the help of the Plain English Society and others, will produce a booklet explaining to parents how the system works. Library briefing papers and other such documents tend to assume that all parents are rational, and that we sit down and think of all the options. Often, our children tell us what they want to do and we interact with them, and we must also remember that many parents have other dimensions to consider. They may have children with disabilities, they may be divorced or separated, or their children might themselves be carers. Life is not simple, therefore, and I hope that Treasury Ministers will undertake to produce for parents straightforward information that they can understand.

Tony Baldry: We all want to enhance primary education. If the hon. Gentleman is right in suggesting that some parents have difficulties in that regard, that is all the more reason why we need to be confident that they understand the various choices available to them. Youngsters must not feel under pressure to leave school early because their parents or guardians do not believe that they have the financial resources to support them.
	If we do not enhance our skills base, we will simply get left behind. Secondly, I hope that every youngster at some stage during their school career, before they take their GCSEs, can have a personal interview with a Connexions representative, who can go through the various options with them and ensure that they have some form of career and education plan between the ages of 16 and 19.
	Thirdly, I hope that we can be confident that parents will be given some straightforward briefing, and I hope that it will be better than that given for the tax credit schemes. What I am about to say might sound rather portentous, but I am not sure that it is possible to say such things without sounding that way. I am fortunate enough to be a lawyera barristerand I spend all my time construing documents. Yet when people come to my constituency surgery with information on the various tax credit schemes, I find trying to understand it all harder than dealing with High Court pleadings. How ordinary people can be expected to understand it I do not know.

Iain Wright: I am pleased to follow the hon. Member for Banbury (Tony Baldry), not least because in his commentswhich, like those of the hon. Member for Buckingham (Mr. Bercow), who is no longer in his place, were non-partisanhe tried to address the principal point of the Bill. As he said, we have a skills gap in this country and must deal with it in order to compete globally with the likes of China and India. I contrast the hon. Gentleman's welcome comments with those of the hon. Member for Chichester (Mr. Tyrie). He, too, is no longer in his place, but he tried to make a petty party political point.
	The fact remains that since 1997, child benefit has increased from 11.10 to 16.10 for the first child. That is what really matters to parents out there. It amounts to something like a 50 per cent. increase in seven years. Perhaps I should declare an interest, as a father of four whose family receives child benefit. More important than my own personal experience, though, is that of the 8,700 families in Hartlepool who have benefited from the Government's child support schemes such as child benefit and child tax credit.
	In my brief contribution I shall concentrate on the skills shortages in my constituency, and how the Bill will substantially improve the skills base for the Hartlepool economy. There is a huge anomaly in the present system, whereby child benefit is paid to 16 to 19-year-olds who stay in full-time education, but not to those who enter work-based training. That severely disadvantages young people who may not wish to go on to further or higher education, but choose to enter the employment market through unwaged training.
	At the moment, choosing the route of unwaged training has a huge impact on the household budgets of families in which 17 or 18-year-olds are rightly expected to pay board and lodgings in the parental home. In reality, that prevents young people from exercising real choice, and can push them down a route in life that they may not really wish to follow. That sort of conditioning or soft coercion prevents people from fulfilling their potential. I think that the Bill will help to eliminate that problem, and should therefore be welcomed throughout the House.
	One of the true success stories for Hartlepool in the last decade has been the educational attainment of our schoolchildren. Last year, for example, Hartlepool schoolchildren provided the fastest improving set of key stage 2 results in the entire country. More 16-year-olds than ever before are now leaving school in Hartlepool with qualifications. I believe that the figures speak for themselves. In 1996, 12 per cent. of Hartlepool's 16-year-olds left school without any qualifications; in 2004, only 5.1 per cent. did that.
	Despite those successes and improvements, significant basic skills deficiencies and vocational skill shortages remain in Hartlepool. There is a recognised difficulty in progressing people from low-level, community-based training and learning to high-level skills and jobs. Some specific groups in the community have real difficulty in accessing training opportunities. I am thinking particularly of young carers, of whom there are substantial numbers in Hartlepool. Many of those are 16 or 17-year-olds caring for a sick relative. Every penny counts in such households, and the Bill's provision to continue financial support for young carers to undertake work-based training will help to ensure that they are not trapped in a benefit rut for the rest of their lives through no fault of their own, because of their wish to care for their relatives. That must surely be welcomed.
	Hartlepool was one of the areas that piloted the education maintenance allowance, whereby 30 a week was paid to young people and a bonus payment made at specific points in the year. The effect on the traditionally lowest-achieving and hard-to-reach groups was hugely positive. Not only did the EMA help to increase recruitment of these difficult-to-reach groups, it had a massive impact on retention, with people not only starting training but finishing the course as well. It also improved the attendance and behaviour of individuals. I would suggest that the use of EMAs in Hartlepool has been found to have tremendous benefits for the individual, for his or her family, for the local skills base and for society in general. The experience of my constituency suggests that the Bill will have hugely positive benefits in continuing and extending financial support for young people to continue training that they might otherwise have been unable to do.
	Another of the Government's successes has been the reintroduction and encouragement of apprenticeships. In the large employers in my constituency, particularly Corus, the profile of the work force is curious. It includes men and women in their 50s or older who came through apprenticeships in the 1960s or 70s. There is then a wide age gap reflecting a lack of regard for apprenticeships, perhaps in the 1980s and 1990s. There may have been a change in fashion in that respect. Then we have young lads and lasses who have started work in the past five years or so. We need more apprenticeships in Hartlepool if the local economy is to flourish. Anything that encourages training and apprenticeships, or the prospects of entering into apprenticeships, as the Bill does, is to be welcomed.
	I believe that the Bill complements and expands on the work done in the past seven years to break the cycle of despair, decline and neglect in run-down neighbourhoods, and to create an environment of hope, opportunity, choice and prosperity. The Bill will stand with such worthwhile achievements as Sure Start and the tax credit system. It will also facilitate the improvement of skills in my constituency and elsewhere, which is so necessary to bring about the sustained economic prosperity that will help the country to compete globally. I fully support it.

Frank Field: I apologise for not being here for the opening speeches, but I shall in no way apologise if I repeat some of the themes that those on the Treasury Bench have outlined. Those themes are part of the celebration that we are having today. I wish to make two points in my short contribution. The first is to congratulate the Government, and to celebrate with them, on the achievement that the Bill symbolises. Secondly, as we are now into manifesto time, I want to suggest how some of the money might be even more effectively spent than it is currently.
	To turn to the celebration, we need only to cast our minds back to the last time a Labour Government introduced a child benefit Bill. They had revolts on their hands, faced chaos and withdrew the Bill. There was a major leak of Cabinet minutes and, under pressure, the then Government reintroduced the Bill and the introduction of child benefit followed. What a difference between then and today. There is now such agreement not only in the House but in the country on the importance of child benefit that, try as they may, even the Opposition do not have a case to make against the Government's proposals.
	We therefore celebrate the transformation in parliamentary views on child benefit and the extension of child benefit to an older age group to reflect the important changes that are necessarily occurring in education and therefore its interrelationship with the labour market. We also celebrate the fact that, at long last, society is beginning to realise that raising children is a huge cost that is disproportionately borne by a small minority of the population at any one time. As my hon. Friend the Member for Hartlepool (Iain Wright) said, we all have a huge vested interest in making sure that parents do the very best possible job of raising the next generation and the people who will pay our pensions. If we cannot be interested for the right reasons, we can be interested out of self-interest.

Frank Field: Indeed, I have concerns. The only rationale for the tax credit only side is to put it into place and then start dismantling the universal side of the welfare state. Clearly, one needs to be vigilant on this issue and, even though one must be concerned, that is not what is before us today. The Bill is about extending child benefit, so it is a day of celebration.
	The hon. Gentleman is right to talk about what might be done in the future and what might be done about support for older children, but I want to consider younger children and our support for mothers. Today, we are also celebrating the influence that the most impressive Back-Bench Member of Parliament ever had on policy. I refer to the influence of Eleanor Rathbone because, when she rose to talk about child benefit, she did not receive a great deal of support from her colleagues. She talked about the importance of endowing motherhood and I fully understand, politically, why she let the campaign move from motherhood to family allowances and the transition to child benefit.
	Like my hon. Friend the Member for Hartlepool, my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Byrne) made a significant point about the importance of antisocial behaviour in our constituencies. Antisocial behaviour cannot be divorced from the way in which young children are nurtured. Parenting skills have been lost in many families in our constituencies, which is why Sure Start is important and we must redouble our efforts on that front. We first introduced child benefit, or more importantly family allowances, in a world in which mothers did not work, certainly in the early years of a child's life. It is now clear that most mothers must work because of economic pressures, so I wonder whether we have the right balance between support for children in the first 19 years of their lives and that in the first two years.
	When I examined the taxpayers' resources that are provided for children, I was surprised. If we add child benefit, the child tax allowances and the extension to 19 under the Bill, we are talking about a budget of 100,000 per child, which shows that a revolution has taken place in my lifetime from the support that existed. Given that we are in manifesto time and many, if not most, young mothers must go back to work, against their natural instincts, to keep their family finances together, might there not be a better way of spending some of that 100,000?
	I hope to engage the services of the Clerks so that I can table an amendment on Report to provide that mothers could opt to take a quarter of that money tax-free during the first two years of their children's lives. That would mean that, if they did not want to work, they would not have to. Such a measure would be important for the welfare of our society because it would raise the financial position of mothers to a level that most women in my constituency could not command in the labour market. We would thus say that motherhood is financially more important than any other job that they could get, and I guess that they would opt for the payment. The scheme would not only interest women who have only the option of low-wage jobs, because it would allow women on higher pay to choose to return to the labour market later than at present. That might greatly influence increasing the importance of the nurturing of children, which is starting to be lost in our society.

Mark Francois: I have two things to say to the hon. Gentleman. First, the Government's approach has been very disparatewe have had the information very incrementally. The Economic Secretary will appreciate that we are asking for the final package and I am seeking to tease out of him whether we are likely to receive that in the 2005 Budget. Perhaps he can throw some light on that point. Secondly, as the hon. Member for Wolverhampton, South-West chose to intervene on me, I hope that he will not think me uncharitable in saying that he was rather pushing the envelope in making his remarks about driving licences. I say to him charitably that we debated the Road Safety Bill yesterday, not today.
	For the record, I appreciate that part of what the Government are seeking to do is to correct an anomaly in the already very complex system whereby parents of those aged 16 to 19 in full-time non-advanced education receive child benefit, while parents of those in the same age group who are unwaged training do not receive it. We can see what the Government are seeking to achieve, but is there not at least a practical argument for cutting to the chase and simply waiting two months for the overall answer and the entire package, if the Government are likely to come up with it, and to move forward from that stage?
	The Opposition also have concerns about the timings for dealing with the Bill. This may be a relatively small Bill, but it is nevertheless an important one, not least to those who stand to receive the expanded benefit. That being the case, the Bill has many of the hallmarks of a rush job. First, it is largely dependent on a set of subsequent regulations that were issued only on Monday, along with the now famous regulatory impact assessment, and which did not allow much time for consultation with interested parties, at least on the regulations themselves, which form the heart of the Bill. Secondly, the Bill is now to be hurried into Standing Committee as early as Tuesday next week.
	Why that headlong rush, not least for a measure that is not scheduled to be implemented for more than a year in any event? The conclusion has to be at least in part that this is an electioneering measure that the Government are desperate to get on to the statute book prior to an expected election in May 2005.
	In addition, I ask the Economic Secretary what the Bill will do for the so-called missing million among our young peoplethe more than 1 million people mentioned by my hon. Friend the Member for Bury St. Edmunds who are not in employment, education or training. The latest figures, from the quarter August to October 2004, which were published by National Statistics as recently as December, show that the number of under-25s unemployed and not in education or training rose by 36,000 on the previous quarter, while the number economically inactive and not in education rose by 5,000an increase of some 41,000 to give a new overall total of 1,118,000, which is well over a million. That represents a sixth of our young people under 25, and has been described by the shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Havant (Mr. Willetts), as a lost generation. It is not clear what this Bill, which is a relatively minor measure, will do to seek to address a problem that now exists on that scale and is a definite blot on the Government's record.
	In reality, the Bill is yet another element in the Brownite agenda. It is not unworthy in its own right, but it has become just a very small part of a much larger gamethe struggle between the Chancellor and the other spending Departments, including the Department for Work and Pensions, for control of the Government's social policy agenda in the run-up to the election. It is meant to be part of Brown's Britain, as opposed to Blair's Britain, Milburn's Britain or even Johnson's Britain. Unfortunately, the Bill that is being introduced today by this now obviously divided Government is a benefit Bill, but it is for the Chancellor's benefit rather than anybody else's.

John Healey: There are 80,000 young people on unwaged Government-supported training schemes, and that is the number of young people who are potentially eligible for the measures that we are considering.
	Let me deal with the comments of my right hon. Friend the Member for Birkenhead (Mr. Field). My right hon. Friend the Paymaster General and I look forward to hearing the advice that he receives about possible amendments on Report. He was right to celebrate not only the extension of child benefit for which the Bill provides but, as he put it, the transformation of parliamentary opinion on child benefit. He knows as well as anyone that part of the ambition and purpose of a progressive Government is to develop not only progressive policy, but a consensus that will support that policy and render its dismantling more difficult in any future change of Government. I hope that he will perceive the support for the Bill from hon. Members of all parties as a further small step towards that.

Lembit �pik: This petition comes from residents of Caersws, Llanwnog and the surrounding area. It
	Declares total opposition to the 15.0 m radio mast located by Manthrig Lane in Caersws, whether it be used for TETRA, for which the application for Planning Permission was originally made on behalf of mmO 2  . . . or for any other communications purpose . . . which the Petitioners understand may be the intention of the mast owners (Crown Castle UK Ltd). It is the Petitioners' belief that all such technology poses a serious health risk to public safety, and that studies into this have been insufficient. The Petitioners further declare that there is an existing mobile phone mast on the corner of Manthrig Lane, thirty yards from the aforementioned 15.0 m mast, and that the latter is adjacent to both a Doctor's surgery and a home for patients with learning difficulties.
	The Petitioners therefore request that the House of Commons urge the Government to demand the dismantlement and removal of the Caersws mast for the reasons aforesaid.
	And the Petitioners remain, etc.
	To lie upon the Table.

Andrew George: I am delighted to have a good amount of time in which to explore the future of EU objective 1 regions. This issue is of concern to many Members, particularly those representing constituencies on Merseyside and in South Yorkshire, in West Wales and the Valleys, and in the Isles of Scilly and in Cornwall, where my own constituency lies. Indeed, I hope that the Minister will take on board the concerns of people living in Cornwall and the Isles of Scilly, a region whose needs I particularly want to emphasise. Unlike other existing UK objective 1 regions, it would clearly be eligible for a further round of objective 1 funding under the next programme. I hope that the Minister recognises that fact and will reflect it in her response.
	The purpose of this debate is to explore the UK Government's negotiations with other EU member states and the Commission concerning plans for the future of EU objective 1 regions in Europe as a whole, and in particular how those plans will impinge on the UK's existing objective 1 regions. The Minister is well aware of my concern, which is shared by all existing UK objective 1 regions and other regions that might be eligible for transitional relief under the next programme, after 2006. Under the Government's existing proposals, there is no certainty about the duration of the funding regime or the extent of funds available under future regimes.
	It will help the House if we remind ourselves of the EU's proposals following publication of the third cohesion report last July. Full objective 1 statusto be called convergence statusis proposed for regions that fall below 75 per cent. of the average gross domestic product of the EU 25. Cornwall and the Isles of Scilly, which has a GDP of 65.3 per cent., looks set to qualify as it is well below that level. Significantly, no other existing objective 1 region falls below that level. However, within convergence there will also be a lesser package for regions affected by the so-called statistical effect. It will perhaps be worth about two thirds of the value of current programmes. As I understand it, West Wales and the Valleys, Merseyside, the Highlands and Islands, Tees valley and Durham would qualify for that, according to currently available figures. However, Merseyside, the Tees valley and Durham could, with just small increases in their GDP, fall outside the scheme.
	As the Minister knows, there is also a smaller transitional package within objective 2, to be called competitiveness, for national growth regions. It is perhaps worth about half of the current programme value: South Yorkshire is currently eligible and Merseyside may become eligible in future. There is also the money via national Governments for all other parts of the UK in respect of national employment policy.
	The Government, of course, want to engage themselves in the question of the EU budget as a whole. The EU proposals are based on a budget of 1.14 per cent. of the member state's gross national income, but the UK and five other large contributors want a budget of just 1 per cent. I know that the Minister and her colleagues are pressing for that. It would leave a hole in the EU budget of about 115 billion. As the Minister knows, if the EU budget is reduced, structural funds are likely to be in the firing line.

Andrew George: The hon. Lady knows perfectly well that the Liberal Democrat shadow Chancellor has made a commitment to honour the eligibility of existing EU objective 1 regions in any future programme. That commitment was made only a few weeks ago, as I am sure the hon. Lady is aware. I am grateful to her for allowing me the opportunity to make that clear.
	The Government have made alternative proposals, which the hon. Member for Falmouth and Camborne (Ms Atherton) supports. She is on record as agreeing with the proposition that the UK should take back the currently available money

Andrew George: Unfortunately, the hon. Lady did not speak long enough for me to look up what she said in a debate on 15 June last year. As she knows, she supported the Government's proposals to repatriate funds to the UK. It is all very well her saying that she supports that proposalbut I can now quote what she said in the House on 15 June:
	I ask Ministers to think creatively over the next few months. I will be supportive of their plans to, so to speak, get our money back.[Official Report, 15 June 2004; Vol. 422, c. 730.]
	She cannot retract those words, which are on the record.
	The problem that I want to explore in this debate is that the promises and so-called guarantees that the Government have offered since the proposals were first put forward in September 2003the relevant consultation document was issued in June that yeardo not contain anything that provides the equivalent of the present funding extended to objective 1 regions. Moreover, they do not undertake to provide the funding over seven years, plus the two-year transitional period, that the EU makes available to the same regions.
	The hon. Member for Falmouth and Camborne supports the withdrawal of support. We need cast-iron guarantees that future funding extended to Cornwall will be equivalent to what is available under existing EU objective 1 programmes, and that that money will be available for the same seven-plus-two year period. In addition, the Government must assure us that Cornwall and the Isles of Scilly can continue the successful partnership that has been established. We must make the Government understand that Cornwall desperately needs and deserves that.

Matthew Taylor: When the Minister discussed these matters in one of the Committee Rooms, it turned out that there were no guarantees to be had, even though the Government had used that word previously. There were no guarantees that the funding would last as long as the EU money, or be equivalent in amountor, crucially, that it would be dedicated to expenditure in the area. The Government are unable to give such guarantees because they do not operate on a Budget time scale of seven years or nine years, whereas the EU can give a commitment for that length of time. Therefore, is it not clear that neither the Minister nor the hon. Member for Falmouth and Camborne (Ms Atherton) supports a deal of the same value or strength as the one that Cornwall presently enjoys? That is reflected in the fact that Labour local authorities around the country, and other Labour Members, have been far more critical of the Government on this matter.

Andrew George: I could not get to the meeting to which my hon. Friend refers because of the debate on hunting, but I have checked all the relevant correspondence, and what he says is true. For example, on 16 December I asked the Economic Secretary to commit himself to guarantee that places such as Cornwall and the Isles of Scilly would get the same level of funding over seven years as was available to them from the EU. In response, he promised that
	UK nations and regions will not lose out as a result of those reforms in Europe.[Official Report, 16 December 2004; Vol. 428, c. 1193.]
	What does the phrase UK nations and regions mean? The hon. Member for Falmouth and Camborne knows welland my hon. Friend the Member for Truro and St. Austell (Matthew Taylor) knows it even betterthat Cornwall is a region for the purposes of Europe, but not for the Government's purposes. It is subsumed in the south-west Government zone. It may be called a region, but it is not treated as such. It has no integrity, and there is no community of interest in the bureaucratic convenience that is represented by the word zone. I fear that the expression means only that the money will go to Government quangos operating in Cornwall, and will not get to those who richly need and deserve it. All the partnership work that has succeeded so well over the past five years will be lost if the money is not given to the people on the ground in the objective 1 regions.
	These are matters of deep concern to many people. The Minister for Trade and Investment wrote to me on 15 November last year, and said that the Government's commitment to the UK's nations and regions meant that
	we guarantee that if our proposal were adopted, we would increase domestic spending on regional policy so that they did not lose out from our proposals. In all cases, the Government have committed that this will be additional to expenditure already planned.
	That is helpful and reassuring, but there is no commitment on the seven-year time frame. Of course there will be more money for regional aid as a result of the repatriation of funds, and it is reassuring that the money will, I hope, be disbursed in that way, but there is concern that the funds will not be used effectively in the areas that would be eligible for regional aid during the seven years from 2006.

Andrew George: I strongly endorse my hon. Friend's comments. The Government promise that countries and regions of the UK will not lose out, but there are serious concerns about the so-called guarantee. That not losing out is against an imaginary comparator, and there may in fact be a net reduction of between 55 and 65 per cent. in the current receipts. The guarantee is general, calculated across the UK; there is nothing specific to any area. It is not aimed at Cornwall, West Wales, South Yorkshire or anywhere else.
	As my hon. Friend said, there is no mention of how match funding will be handled. In the current objective 1 programmes for the UK, match funding doubles the value of EU structural funds. In Wales and Scotland, the extra money would go to the devolved Administrationsrightly sobut they are not required to spend it in a particular area, or even necessarily on regeneration.
	In England, distribution would probably be through the regional development agencies, and there is no guarantee that they would spend the money in the neediest areas or in those that currently have objective 1 status, nor that they would recognise the needs of those regions. The Government have not yet sufficiently explained how their plans for, or commitment to, a seven-year lifespan will be delivered.
	Let us consider the figures for the EU as a whole, and for the areas in the 10 accession countries that could have objective 1 status. The Czech Republic, Poland, Bratislava in Slovakia, Slovenia, Malta and Cyprus will all receive objective 1 funds, yet their gross domestic products not only exceed that of Cornwall and the Isles of Scilly, but exceed it to a large extent. That is an obvious injustice. The Government appear not merely to be signing up to, but to be the main protagonists for, a system whereby Cornwall would not receive objective 1 aid, yet regions in accession countries that are not as poor as Cornwall would benefit from such aid. That is wrong.
	If the Government want to stick to the 1 per cent. proposaland one can understand whythey could adopt the negotiating position that objective 1 regions will be determined purely on their merits, irrespective of whether they are in accession states. If the Government accepted that alternative, there would be a greater likelihood of equity in the system. When we have debates on the subject there is always a scramble to claim credit for achieving objective 1 status, and no doubt the notes that the Minister will read out later will say that it was all thanks to the Labour Government. I am grateful to the Government, who were among the large number of contributors to Cornwall's success in achieving objective 1 status. The then MEP, Robin Teverson, and the local authorities worked hard. The people of Cornwall marched and campaigned, and the quiet statisticians of Eurostat, Cornwall county council and elsewhere made the arguments for achieving technical change, particularly the statistical separation of Cornwall and its relatively wealthy neighbour, Devon. All those people made a significant contribution to getting the objective 1 status that Cornwall and the Isles of Scilly richly deserved.

Andrew George: I was told by the regional quango that it was all thanks to them. Everyone's contribution was critical. The Prime Minister's support was important, but there was a partnership and no single contribution was more important than any of the others. Cornwall was clearly eligible as the poorest region in the UK, so it was a question of whether anyone was going to stand in the way of something to which it was richly entitled.

Andrew George: I agree that objective 1 does not exist unless there is public match funding. If a Government, having signed up to objective 1 programmes in certain regions, did not match the funding, that would be a failure. The fact that this Government have largely honoured the promise that they made to match the funds is very much appreciated. I am sure that it is appreciated in Liberal Democrat Merseyside just as it is in other regions.
	The objective 1 programme in Cornwall has been a significant success. When we compare Cornwall withdare I say it in the presence of those representing these regionsother objective 1 regions, we see that it has met its targets for commitment and spend. Significant projects have been funded in Cornwall as a result of objective 1. For example, there has been the rolling out of broadband, and the Combined Universities in Cornwall has its hub around the county. Objective 1 has also made a contribution to the Eden project.
	There have been many other significant contributions to projects around Cornwall, but the full effect of objective 1 and the investments made through the programme are not yet being fully felt. Clearly the gross domestic product of Cornwall has not yet reached anywhere close to the 75 per cent. level of the EU 25 average, so there is still more work to be done.
	On overall funding, and as a slight interlude, I should point out that problems still exist with the programme, and the partnership in Cornwall has been working heroically to overcome them. They are partly the result of the complexity of the system, but also of the way in which it dovetails into the many other area-based initiatives that the Government are offering. We are grateful for them.
	For example, in Cornwall and the Isles of Scilly, among the many initiatives, we have objective 1 integrated area plans, the much-appreciated neighbourhood renewal programmes and health action zones, the healthy towns initiatives, healthy living initiatives, market town initiatives, coastal town initiatives, vital villages, Sure Start, the Cornwall action team for jobs[Hon. Members: Labour.] We also have neighbourhood nursery schemes, the parish paths partnership, partnership development funds, the skills development fund, the rural key fund, rural renaissance initiatives, the community champions fund, community chest, the community empowerment fund and the safer communities initiatives. [Hon. Members: Labour.] I have named just a few, and if Labour is claming credit for all of them, it should provide a strategy in which to deliver them.
	Unfortunately, we have initiative fatigue in many areas, because so many bodies, visions, missions and committees have to be set up with the same people sitting on the same committees to manage little pots of money. I am not saying that we are not grateful, but it would be far better simply to devolve the pots of money and allow local communities to determine how best to revive themselves.

Andrew George: Absolutely. I have been taking up my worries about area-based initiatives and the complexities that have been created for some time, which is why I was keen for the regional co-ordination unit to acknowledge that there were problems with the bureaucracy surrounding the system. I suppose that the situation is in a way caused by the successful creation of many development programmes and area-based initiatives, but the complexities and problems that I have tried to describe have come with that. If the Treasury and the Government intend to introduce an initiative to try to iron out the problems of bureaucracy and delivery and to devolve responsibility so that people on the ground can make decisions, I will say, Alleluia, and strongly support it.

Andrew George: The hon. Gentleman must also recognise that, just as we had the discussion earlier about claiming creditI can assure him that the South West of England Regional Development Agency, which is not an elected or accountable body, still claims credit for having achieved objective 1 status for Cornwallin exactly the same way, Cornwall has had to fight all the way to achieve what it has achieved so far, and to achieve what it has achieved within the programme. The commitments made, which he will have heard me enunciate earlier, if he was in the Chamber, when I quoted letters and statements made by Ministers, are not sufficiently specific, on time scale, geographical coverage or the programme levels. There are clearly encouraging statements, but they do not amount to the kind of cast iron guarantees that exist in the third cohesion report. One can either see in that report a clear commitment for a seven-year period, plus two, and know that, depending on the negotiations, there will be a budget, or there will simply be promises of an intention to deliver, which we do not know will be achieved.

Llew Smith: Before I became a Member of Parliament, I spent 10 years as a Member of the European Parliament. Throughout those 10 years, I and other Labour MEPs campaigned for objective 1 or a scheme that could deliver similar investment not only in Wales, but throughout the United Kingdom. Like those Labour MEPs, I would like to claim credit for delivering objective 1, but in my more modest moments, I admit that its successful introduction was because of the election of the Labour Government, without which objective 1 money would not have come into communities in my area, south Wales.
	I remember when nationalists in Wales argued that it would be impossible to introduce objective 1 into Wales because of the absence of a Welsh Parliament and the lack of independence for Wales. The Labour Government showed that independence and a Welsh Parliament were irrelevant and that, given energy and ideas, it was possible to deliver objective 1. They delivered objective 1, from which communities such as mine have benefited for a number of years.
	Objective 1 can play a major role in helping to revive communities. In Blaenau Gwent, for example, we have some of the highest levels of unemployment in Wales, some of the lowest wages in the United Kingdom and some of the worst health problems, which involve heart disease, respiratory disease and lung cancer. We are near the top of the list for problems relating to mental health, we have low levels of car ownership and our housing stock is very poor. Those problems have not gone away as a result of objective 1, but objective 1 can play a major role in particular communities.
	We should not try to convince ourselves that the problems have gone away. In Blaenau Gwent, for example, we still have a major unemployment problem, which involves not only the number of people who are unemployed, but the kind of jobs that we have lost in our communities. We have lost a big part of our manufacturing base. In the 1980s, we lost the coal industry, which was a major supplier of jobs in our particular community. More recently, we have lost the steel industry and other major manufacturing companies such as Bosal and Faurecia. Just before Christmas, Yuasa Battery announced that it was to make between 200 and 300 people redundant and the work was to go to another country.
	Just last week, I met the work force of Merton Packaging, which has been functioning in my community for the past 20 years. The work force are very skilled, highly motivated and loyalso loyal that they have not had a wage increase for four or five years. On returning to work after the Christmas holidays, they found that the doors were locked and were told that the company was going into liquidation. That is the kind of behaviour that one would expect of a 19th-century employer, but this is a present-day employer, operating in my community.
	It is not only the number of jobs that is important, but the kind of jobs. We have attracted jobs to Blaenau Gwent, but far too many of them have been low-paid, part-time, non-union, soul-destroying jobs. It is interesting that we, like other parts of the country, are losing jobs to other countries, but our jobs are being lost from a community that has some of the lowest wage levels in the United Kingdom. If we cannot reclaim those jobs, there are obviously problems in other parts of the UK.
	On tackling low wages, the minimum wage has obviously been an important policy development for my community, but it is still much too low. It needs to be dramatically increased if people are to have the dignified lives that they deserve for their labours.
	In Wales, we have an additional problem in that much of the investment, which is the responsibility of the National Assembly for Wales, has been directed not to some of the poorest and most deprived areas but to some of the richest communities in Wales. There is a shortage of money in many areas, including Blaenau Gwent, but investment is going to places such as Cardiff bay. We saw an example of that just before Christmas, with the opening of the Wales Millennium Centre, a glorified opera house, which cost over 100 million and has been guaranteed by Rhodri Morgan a permanent subsidy of 2 million a year. Just imagine what some of the deprived communities in Wales could do if they received the kind of money going to the richest areas. We need to continue and increase the investment going to those deprived communities. With the amount of money going to Cardiff bay, Blaenau Gwent could revolutionise life in our community. Objective 1, with all its limitations, must continue in one form or another.
	If we are to attract jobs to Blaenau Gwent, we are told that we must concentrate on high-skilled jobs. I agree to a certain extent, but we have problems because the amount of investment in further education in Gwent is decided by the quango Coleg Gwent. Midway through last year, it decided to close the engineering and catering departments in my constituency, which is probably the most deprived area in Wales. The new principal of Coleg Gwent and the deputy director of ELWa said, Not to worryyour constituents can still study engineering but they can do it in Nash, which is in the outer part of Newport. I do not have a PhD in geography, but I understand the difficulty of travelling from my constituency to Nash in Newport. Indeed, if a student from Blaenau Gwent wished to study engineering in Nash, it would take a round trip of five hours. If he or she decided to spend five hours on public transport, they still would not arrive in Nash in time for the commencement of the course each day. How can communities such as ours concentrate on trying to attract high-skilled jobs when the people responsible for further education are closing the very departments that can deliver the training and education necessary for those jobs?
	Other people in authority have said, We've got to concentrate on attracting tourism to Blaenau Gwent, because it is a beautiful part of the world. No one doubts that. Yet the people who control Gwent's further education decided to close the catering department. How can we boost tourism in Blaenau Gwent by closing the catering department, which plays an integral part in the training required for a buoyant tourist industry?
	The problem with objective 1 is not a shortage of money, but priorities. In the years when I was in the European Parliament, the priority was to concentrate on directing moneys towards the agricultural sector through the common agricultural policy. Every year, at budget time, the Commissioner would make a statement in which he told us, Things are not well with the common agricultural policy, but not to worrytomorrow all these things will be changed, the problems will be rectified and the amounts directed to agriculture will decrease. In other words, areas such as mine would benefit. That has not happened over the past decade or so, and I suggest that it will not happen in any big way in the months and years to come.
	If the European Union and the European Parliament are to be seen as relevant by the people outside, they must be seen to be responding to the problems that people have in communities such as mine. Until now, leaving aside noble exceptions such as the objective 1 programme, they have failed in a big way to do that. We must not forget that we are still paying more into the European Union than we are receiving back, even allowing for the rebate. That injustice should be rectified.
	My final point concerns who takes the decisions. The hon. Member for St. Ives (Andrew George) spoke about the role of quangos, which has been a contentious subject in Wales. We were told that, if we elected a Welsh Assembly, it would bring about a bonfire of the quangos, but that has not happenedit has been very much a damp squib. Too many decisions in Wales are taken by people who are not elected, not accountable and cannot be removed. That is surely wrong. We want decisions to be taken by people who are elected, are accountable and can be removed if people see that they are not responding to their problems.
	We were promised not only a bonfire of the quangos, but that many of their powers would be transferred to democratically elected bodies such as local authorities. That has not happened in Wales. People in Wales know now, if they did not at the time of the referendum for the National Assembly, that they were conned in a big way. Many people went along with it, even though some of us argued and predicted the result.
	There are big problems, not only in my community but in communities throughout the United Kingdom that still suffer from unemployment, the loss of good jobs, low wages and all the deprivation that goes with that. We need some sort of scheme to continue after 2006 if our problems are to be rectified.
	I want to end as I began. I would like to claim credit for objective 1 funding, and I am sure that other former MEPs would too, but we would admit in our humbler moments that it is due to the election of a Labour Government. I say that as someone who has been somewhat critical of the Government on one, two or perhaps three occasions.

Lembit �pik: There are two elements to the hon. Gentleman's question. First, he is right to say that there is no question but that the funds have to be available. We need to have a transparent debate on the relative cost to the wealthier nations such as the United Kingdom of ensuring that the funding is there. He did not saybut I willthat other parts of Europe, including the 10 accession countries, will also be making similar claims. I know for a fact that Estonia is likely to do so, so there is a funding issue involved. The action to take in that regard is for us to have a longer debate on the financial implications of UK expenditure in that system and on what the likely return would be.
	The second part of the hon. Gentleman's question can be answered as follows. The Liberal Democrats' strategic interest in speaking in favour of maintaining something like the existing system stems from our faith in the fact that the funding is long term. It could last until 2013 or even 2014. Our concern about the alternative system is that there could be no guarantee of funding over such a long period, during which there will necessarily be a number of general elections. Government policies might change and the promises made by the Chancellor of today might not be honoured by the Chancellor of tomorrow. That is the difficulty. We therefore have a strategic concern about the solidity of that long-term funding arrangement, which could change depending on who was in office in the Exchequer and who was in Government.

Dave Watts: Does the hon. Gentleman agree that the long-term regeneration of areas such as mid-Wales, Yorkshire and Cornwall depends on the Government themselves making resources available? At the end of the day, whether an area has an objective 1 or objective 2 programme, the amount of resources that will be made available depends on the whim of the UK Government of the day. Does it not give the hon. Gentleman confidence that, since 1997, this Government have shown that they have vastly increased those resources? Is not the best way to ensure that those resources are available to objective 1 and 2 areas to tell people to keep on voting Labour?

Lembit �pik: Of course not, and that is the point that we are discussing. My hon. Friend the Member for St. Ives suggested that the hon. Member for Vale of Clwyd (Chris Ruane) and I should settle this score outside the Chamber. I have just been reading a book about the great fight between George Foreman and Muhammad Ali, and I fear that it would be less The Rumble in the Jungle than Danger down in Strangers. I am sure that we can accept one common issue: the frictions that seem to arise in this debate about the certainty of long-term funding are shared, regardless of the colour of the Government. Long-term certainty is therefore what those in business engaged in long-term investment crave, as they can then make long-term plans. That is very important for industry.

Lembit �pik: The hon. Gentleman is right that subsidiarity and flexibility are important. I believe that they can best be achieved through a more guidelines-based approach to how funds are spent and clarity about the outcomes required from the expenditure. A Europe-wide debate about that in the months ahead would be constructive. The hon. Gentleman's constituents, and mine, would benefit from the localisation of some investment, rather than money being invested in wealthy areas that do not need it so badly.
	I am pleased that the Government have shown more commitment to this funding programme than I think would have been shown by a Conservative Government, although I am sad that they have not shown as much commitment as the Liberal Democrats will after the next general election, when we form the Government. Let me end on a positive note. The foundations laid by Labour will certainly be built on by the Liberal Democrat Government in a few years, and I thank the Government for the work they have done, but I make them a promise: they ain't seen nothing yet.

Candy Atherton: I welcome the opportunity to speak. As many Members on both sides of the House know, I have taken a particular interest in objective 1. I was delighted when the debate before this finished early, because it meant that this debate could continue for longer. It is a critical debatealthough whenever we have such debates I experience a sense of dj vu. The doom and gloom mongers always emerge and say, It is never going to happen; we will never get what we need.
	I well remember when Cornwall first set out to achieve objective 1 status. I entirely accept that many people were involved in the campaignthe Liberal Democrats, the Labour MP, the Liberal Democrat MEP of the day, the county council and the community. We all stood together and we all argued the case, but the fact that we were statistically linked with our colleagues and friends in Devon constituted a barrier preventing us from obtaining stand-alone regional status in the European Union and receiving the money. The critical moment occurred when the Prime Minister instructed senior civil servants and fellow Ministers to make the case for decoupling us from Devon.
	I remember the Liberal Democrats saying, It will not happen. There was much beating of breasts. They said, We must go to Berlin to make sure that this Labour Prime Minister does not forget Cornwall. It will be forgotten among the great mass of other issues. But the Prime Minister delivered for Cornwall. Then what did the Liberal Democrats say? They said, We will never have the match funding.
	The hon. Member for St. Ives (Andrew George) smiles, because he knows that that is absolutely true. Every time we have done anything involving objective 1, the Liberal Democrats in Cornwall have said, It will not happen. Four years ago, almost to the day, the hon. Member for Truro and St. Austell (Matthew Taylor)who is not presentaccompanied me to the launch of combined universities in Cornwall, which was also attended by the regional development agency, the higher education partners and all the people who had worked so hard on the project. Having been briefed on it, the hon. Gentleman told the media that the British Government would not come up with the match funding. And what has happened? The buildings have been built, the staff are in post, the students are there, and we have a fantastic icon for Cornwall.
	I applaud what the hon. Member for St. Ives says about ensuring that we secure the best possible deal for Cornwall. I will stand up for that and fight for it. We must look at the history, however, and the history is that this Government and only this Government have really invested in Cornwall. Ten years ago, unemployment was soaring. A journalist to whom I was talking the other day said, We could not wait for the unemployment figures 10 years ago, Candy. We used to snatch them off the fax machine. It was always a great story for us because the figures were so awful. We do not even report them now.
	The challenge for phase 2 of objective 1or son or daughter of objective 1is to ensure that we raise wages in the county and do not have to fight for more money in the future because the economy is vibrant and dynamic and we are standing alone. The hon. Gentleman mentioned that earlier.

Andrew George: I wanted the hon. Lady to hesitate at least for a while, although I appreciate that she was, in fact, in full flow. I think that she has rather overstepped the mark. Not only have many who were involved in the achievement of objective 1 status been airbrushed out of history, but there has been a certain amount of rewriting. The hon. Lady claims, among other things, that it was all doom and gloom and we said that we would never receive match funding. She must understand the distinction between saying that that would never happen and saying, as my hon. Friends and I did, that we needed to campaign for the match funds and the projects. We realised that we had to campaign hard to achieve those things.

Candy Atherton: Opposition Members laugh, but that is not what the people of Cornwall do when such comments have their impact. Anything that causes uncertainty and hesitancy, and which places a question mark over future investment, has a real impact on the business community. Many people in the business and public sectors have come to me and said that such comments have a bad effect. I am not saying that only the Liberal Democrats are to blame. There is a regional

Dave Watts: Does my hon. Friend, who has championed this issue on Cornwall's behalf for many years, agree that it is very easy to get carried away with objective 1 and 2 funds? Frankly, Cornwall's ability to regenerate will be determined not by whether or not it has an objective 1 fund, but by whether the Government of the day provide the resources that this Government have provided since 1997. Such funding, although a helpful contribution, is a fraction of what is needed; it is not the main factor.

Chris Ruane: I congratulate the hon. Member for St. Ives (Andrew George) on securing the debate. I know that he has been active in the all-party objective 1 group. We have made progress over the years on this issue and we are now at a critical point in securing the funding that objective 1 areas need.
	Members who have already spoken have given a flavour of their own areas, constituencies and regions, and I should like to give a flavour of my area. The counties of Denbighshire and Conwy were not included in the original objective 1 bid for Wales, which was for 13 of the 22 counties. The Cardiff business school came up with some statistics, however, to prove that Denbighshire and Conwy did indeed have a low gross domestic product. That information was passed to the head of economics and economic development in Denbighshire, Gareth Evans, who forwarded them to me as the principal MP for the county. I then passed the statistics on to the research department of the House of Commons. When they were rejigged according to EUROSTAT standards, Denbighshire and Conwy came out even worse. Conwy had the lowest GDP in the whole of Walesat 58 per cent., lower even than Cornwall. We were joint bottom with Bridgend, if I recall correctly.
	I and my colleaguesmy hon. Friends the Members for Clwyd, West (Gareth Thomas) and for Conwy (Mrs. Williams) and, indeed, the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd)were able to lobby the then junior Minister with responsibility for objective 1 in Wales, my right hon. Friend the Member for Neath (Mr. Hain), to consider the new statistics and allow Denbighshire and Conwy to become part of the objective 1 bid for Wales. To his credit, my right hon. Friend did that. Had he failed to do so, we would have been looking at a rejuvenated Flintshire and Wrexham to the east, an objective 1 area in the north-west of Wales and an objective 1 area in Merseyside. That would have left us hanging in the middle like a black hole for ever.
	I am therefore very pleased that that junior Minister, now the Secretary of State for Wales and my boss, took that decision in the teeth of opposition from some senior nationalist politicians, not to mention some Labour politicians down in the south. The opponents believed that looking into that case at such a late stage would upset the applecart, result in EUROSTAT crawling all over us and jeopardising the entire objective 1 bid for Wales.
	I hope that that gives the flavour of the history of objective 1 in my area. I like to feel, as do others, that I played a full part in securing objective 1 status for my region. I pay tribute to the House of Commons research department for supplying me with the statistics that proved critical in convincing the then junior Minister to accept Denbighshire and Conwy.
	It is worth comparing the Labour record with the previous Conservative Government's record. They took away assisted area status from my area of north Wales, despite the fact that we had lost about 21,000 jobs as a result of the closure of the Shotton steelworks only 10 years before assisted area status was taken away from poor areas in north-west Wales. It is to the Labour Government's credit that Denbighshire and Conway, west Wales and the valleys have objective 1 status.
	We have made good use of the money that we have had over the past four years. We will have it for another two years, and it is important that we have a lengthy tailbackseven years, plus twoto make sure that we finish the job that we have started. The decline has gone on for 40 years in seaside towns such as Rhyl, Kinmel Bay, Colwyn Bay and Llandudno.

Wayne David: Does my hon. Friend agree that the fact that central Government have given allocations to Wales over and above the Barnett formula has been crucial to the success of the objective 1 scheme in west Wales and the valleys? That has allowed match funding to take place.

Chris Ruane: I agree, and will deal with that point shortly.
	What type of jobs have been created? The traditional industries in my part of north Wales are coal, agriculture and the work that goes on in seaside towns. They have been in slow decline over the past 30 years and the structural funds will allow us to change the structure of the north Wales economy.
	That is happening in my constituency. An example is the St. Asaph business park, which was built by the previous Conservative Government at a cost of 11 million. The connecting flyover alone cost 2.5 million. The park was empty for seven years, with only 100 jobs in all. Since the Labour Government took office in 1997 and objective 1 status was granted, the number of jobs has risen to 2,500.
	Those high quality jobs could not have been secured without objective 1 funding. For example, the OpTIC project cost 15 million, of which 6 million came from objective 1 funding. It is an incubation and research centre, with 24 individual units. It will co-operate with the 35 existing electro-optic equipment companies in north Wales, which employ 2,500 workers. If one of those workers has a good idea, further research can be performed at the centre to assess its value. Successful ideas will be given a unit and allowed to grow. These companies will have an 80 per cent. survival rate over a five year period. That is an example of how high quality jobs will replace the jobs in farming, mining and seaside towns. Every two years, 24 new high-tech companies start up in my area of north Wales. They will provide the sustainable jobs that we need for the 21st century.
	The momentum created in the St. Asaph business park has attracted other firms. The Japanese firm TRB was the first ever foreign company to make inward investment in my constituency. The Austrian company Pachem has established an objective 1 factory in Rhyl's south-west ward. I was brought up in that ward, and it is in the top 5 per cent. of the poorest areas in Wales. That foreign investment will raise our profile around the world, because of objective 1.

Chris Ruane: Yes. We have raised the question of state aid in relation to Denbigh high street and I have asked Glenys Kinnock to look into the matter with a view to getting the state aid rules revised and clarified.
	There is more to this than putting up large sheds for Japanese, Austrian or even native companies. We must be able to provide the skills that those companies need. Objective 1 status in my area has helped Llandrillo college, which is situated some 20 miles away, to establish colleges in some of the poorest communities in Wales. For example, the west ward in Rhyl is the poorest of all the 865 wards in Wales. A college has been set up there for the first time in the town's history, only 100 yd away from that ward's boundary. The philosophy of the college is to reach into those poor communities and raise the skills of their people so that they can access the high quality jobs that are being created at the St. Asaph business park and in other places in north Wales.
	I give credit to the principal of Llandrillo college, Huw Evans, for having the foresight to establish Rhyl college, headed by Irene Norman, and Denbigh college, headed by Julia Hughes. They are doing fantastic work in those towns and are also establishing links with smaller communities such as Bodelwyddan and Meliden, through their philosophy of taking learning into the community. Building on such work we will be able to raise the skills level so that people can get higher-paid and better jobs in the future.
	The hon. Member for St. Ives (Andrew George) tried to make the point that there was initiative overload by referring to between 20 and 30 Labour initiatives, but those initiatives are targeted and specific. They are not in competition with objective 1; they can co-operate with it. The Labour Government changed the rules on town heritage initiative grants. Under the previous Conservative Government, the fund for the Churchill diaries was awarded 12 million to prevent the diaries being sent to America, and 5 million was given for the playing fields of Eton. We said, No more of that. Under a Labour Government, THI money goes where there is poverty and where there is architecture.
	We changed the rules. The initiatives can be complementaryin towns such as Denbigh and Rhyl in objective 1 areas, THI money is coupled with objective 1 money to revitalise town centres that were neglected for so long under the Conservative Government. Those initiatives can result in additional funding for poorer communities.
	We need to put the matter in perspective. In Wales, objective 1 funding, with UK, EU and private money, amounts to 3.2 billion. The Welsh block grant was 6.5 billion in 1997, but it is now about 12.5 billion a year, so we need to keep things in proportion. We have been giving credit to ourselves and to others, but we should also give credit for the macro-economic management of this country since 1997.

Chris Ruane: Indeed. That is one avenue that might be explored.
	The macro-economic position has helped west Wales, the valleys and my constituency, as well as the constituencies of many Members. Objective 1 would not deliver on jobs if we did not have the lowest interest rates for 30 years or our current employment levels. People are employedthey have money in their pockets and can buy the goods and services that we are creating in Wales. The macro-economic policies have been fantastic since 1997. They have not just dropped from the sky and are not, as the Opposition say, the golden legacy of the Conservative era. They are the result of deliberately targeted policies such as the new deals for lone parents and for young people, child care provision and Sure Start, which allows young mothers and families to get back to work in the knowledge that their children are being looked after properly. Also helpful was the decision, opposed by the ConservativesI do not know about the Liberal Democratsto give control of interest rates back to the Bank of England.

Chris Ruane: I would disagree.
	Other colleagues wish to contribute, so I shall conclude. I sing the praises of west Wales and the valleys and of Andrew Davies, the Minister for Economic Development and Transport in the Welsh Assembly, as he is an unsung hero who does not receive enough credit. I have given credit to the Chancellor and the Prime Minister for their initiatives, but I pay credit to Andrew Davies who has overseen objective 1 implementation in Wales and done a fantastic job. I pay tribute to the work of Chris Farrow, the head of the Welsh Development Agency in north Wales. We have the best record of economic development in Wales, and a great deal of that is down to Chris Farrow. All in all, Labour has done a good job.

George Howarth: I apologise to the hon. Member for St. Ives (Andrew George), as I was not in the Chamber when he opened this Adjournment debate. Unfortunately, I had responsibilities elsewhere in the House, but I did manage to catch most of his speech. I congratulate him on raising this subject, as it provides a timely opportunity for many of us to contribute.
	I shall make some general observations about objective 1 and its future, followed by some specific observations about Merseyside. I am grateful, as are other Merseyside MPs, for the dialogue that we have been able to develop with our right hon. Friend the Paymaster General about the future of objective 1. We had a meeting in her office, and the door is still open. She paid us a visit a couple of months ago, and productive discussions about our approach in future are under way between Members of Parliament and Ministers, and between officials from local government on Merseyside and officials in the Treasury and the Department of Trade and Industry. The hon. Member for St. Ives painted a gloomy picture, but there is hope that the process of changing to a new system will be managed in a beneficial and helpful way.
	I take issue, however, with people who argue that the Commission's proposals are the answer to the problem. The issue needs to be reviewed, as the hon. Member for Montgomeryshire (Lembit pik) suggested, because the membership of the new accession states means that there will be a statistical shift in the average GDP, thus affecting the 75 per cent. cut-off. Areas such as Merseyside, although we are not yet prosperous by any means, will find it more difficult to qualify for objective 1 funding. The same may be true of Cornwall, but I am not in a position to say. Cornwall will still qualify, and it could be under that formula. That is more doubtful in Merseyside's case, partly because of the dramatic improvement that has taken place in our economy since the advent of a Labour Government.
	If we were to go along with the Commission's proposals as they now stand, I understand thatmy right hon. Friend the Minister will correct me if I am wrongfor every 14 the Government put into the fund, objective 1 areas will get the benefit of 1. I know that the Liberal Democrats are generally pretty profligate with taxpayers' moneyin theory, at leastbut it is a really poor deal to raise 14 to get 1 back in return. If the hon. Member for St. Ives will forgive me, I do not think that the Commission's proposals are the most sensible way of conducting these matters.
	I would like to make one more general point. I do not wish to appear ungrateful, but we now have a number of different funding streams for areas, such as mine and that of my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle), that still have economic and social problems. The neighbourhood renewal fund, the new deal for communities, which touches on part of my constituency, and the single regeneration budget all provide additional resources and are very welcome, but there is a difficulty in that too many funding streams come into areas such as ours. There is some duplication, and certainly confusion. It would be sensible from the Government's point of viewand this is probably the intentionfor them to bring all the funds together, package them so that the same imaginative range of measures as are being carried out already can continue, but focus them more sharply on the areas that really need the most attention. I hope that out of the productive discussions that are going on, we can achieve that.
	I now wish to make some Merseyside-specific points. I will be brief, because I think that my hon. Friend the Member for Liverpool, Walton will add to them. My constituency and Merseyside have benefited enormously from objective 1 funding. The local college, Knowsley community college, has sites in Knowsley, South and in Kirkby, in my constituency, and it has received enormous assistance from objective 1 for courses and other developments. We have transport improvements, and investments in industry and in the North Mersey business park, which my right hon. Friend the Paymaster General visited recently. That has enabled many small businesses to take off in a sheltered and helpful atmosphere. An awful lot is being achieved already, particularly in Knowsley and in parts of Sefton. I pay tribute to the contribution that local government has made towards that, because it has been enormously helpful in those areas in particular.
	The hon. Member for St. Ives referred earlier to Liberal Democrat Merseyside, but I have to tell him that only part of Merseyside is Liberal Democrat, and in terms of objective 1, it is the worst performing part. My hon. Friend the Member for Liverpool, Walton will probably bring more examples to bear if he is fortunate enough to catch your eye, Mr. Speaker, but I shall name three projects that have received support from objective 1. As a result of the actions of the Liberal Democrats in Liverpool, two of them will never see the light of day.
	The first is the prestigious Kings Dock waterfront development, which might have brought a football club to the area. It would certainly have provided a stadium for concerts, a facility sadly lacking on Merseyside. There was a great deal of attention in the media, and a great deal of spinning on the part of the Liberal Democrats in Liverpool, but where is that project now? There will be a development on the Kings Dock, but it is much scaled down. The Liberal Democrats squandered the opportunity.
	The fourth grace was supposed to be a prestigious piece of architecture to go alongside the Three Graces on the waterfront on Merseyside, which have a worldwide reputation. Much money was spent and there was a great deal of objective 1 involvement. A design competition was held and an imaginative futuristic design was selected. It might not have been to everyone's taste, but it was an important venture. Where is it now? Scrapped. No fourth grace. A lot of money was spent and there was a great deal of European commitment to itbut Liverpool city council, Lib Dem-controlled, failed to deliver.
	The project that affects me the most is the tram scheme. Labour-controlled Merseytravel have a proposal, which will still be implemented, to link Liverpool city centre with Kirkby in my constituencya hugely important development, not only in terms of transport, but in terms of economic development. Every area that it goes through is a Pathways area, which under objective 1 is designated as the areas under most stress. The scheme is brilliantly designed. Who nearly wrecked it? The Liberal Democrats on Liverpool city council, by arguing, among other things, about whether the stanchions to the tramline in William Brown street should be black or grey.
	The scheme, which had objective 1 money from Europe, was nearly wrecked. I believe the Liberal Democrats in Liverpool wanted to wreck it because they wanted it to go along a different route. They did not want it to go through the poorest areas, but through the leafiest suburbs, where they are gathering votes. Although we are grateful for the work that the Government are doing and for all the assistance that we have had through objective 1, I hope that the Minister will keep a careful eye on the capacity of the Liberal Democrats in Liverpool to squander those benefits and make the whole region a laughing stock.

Peter Kilfoyle: I, too, congratulate the hon. Member for St. Ives (Andrew George) on securing the debate. As has been evidenced this evening, hon. Members from around the country have a great interest in the outcome of the conversations about objective 1 taking place in Government and in the European Union. However, the hon. Gentleman did himself and objective 1 a disservice when he spoke about it in the terms that he used. Let me remind him of the background, from the perspective of an area which had objective 1 status long before Cornwall.
	Twenty-three years ago, a journalist called Stanley Reynolds wrote an article entitled The Museum of the Horrifying Example. It was a caricature, in my view, but an unhealthily realistic one, of Liverpool at that time as a stereotypical city in post-industrial decline. The city laboured for another 10 years under that image of itself, due mainly to Sir Geoffrey Howe's report, The Managed Decline of Liverpool, which would have consigned the city to oblivion. It was a difficult time to live in the city and to champion it, not least because of the problems there.
	Along came objective 1. I mentioned in an earlier intervention the two key levers in Merseyside's caseBruce Millan and Graham Meadows. I appreciate what was done by MEPs and other interests, but those two men made the moves that enabled Merseyside to get objective 1 funding. That was unique. The Highlands and Islands of Scotland and Northern Ireland got it, but they had Government offices that could act as the interlocutors in all that needed to be done between the Commission and the recipients of the funding. We did not have that.
	The Tories set up a monitoring committee, which was a total and abject failure to begin with. I would argue that in some ways it did not improve a lot over time. It consisted entirely of public servants and quangocrats to begin with. The private sector was the first to renege on it. I was told that I could not meet anyone without the express written permission of the Minister concerned, because there was no locus for mere Back Benchers, particularly Opposition Back Benchers, anywhere in objective 1. Nevertheless, we struggled through and obtained objective 1.
	We are unique in another sense in that, as far as I am aware, we are the only objective 1 area to get a second tranche of objective 1 support. The reason was simple. It was said that we had not made that 75 per cent. GDP cut-off point, which, at least as far as the statisticians in Europe were concerned, would enable people on Merseyside to stand on their own feet. We were more than grateful to receive it a second time round.
	The hon. Gentleman implied, to put it no stronger than that, that we were naive in our optimism following discussions with the Paymaster General. The last thing that the hon. Gentleman can say about me, and about my colleagues on Merseyside, with our long and bitter experience, is that we are naive about these matters. I still have my reservations about the outcome of the negotiations, as we were all right to do. We should be critically constructive in what we want out of those negotiations. But at the end of the day it is the outcome that counts, and whether that form of aid is repatriated does not matter one jot to people in the hon. Gentleman's constituency, my constituency or anybody else's constituency. What they want to see is their material lot improved, in whatever form it takes, and this is a damn good form. I trust the Paymaster General and accept that she was acting in good faith when she assured us that there would be no loss within those regionsthat the regions would be supported on the basis of their need.
	Other things have happened in the recent past that emphasise how the Government are refining their way of defining need. Now we do not do it on a ward basis, as the hon. Gentleman knows. The Office of the Deputy Prime Minister produces lists of specific output areas to define deprivation. I am keen on objective 1 and on continuing to get a good deal, because the No. 1 SOA for deprivation is in my constituency, as is the No. 10. In fact, the whole of my constituency is in the top 1 per cent. of every one of the deprivation indicators. So I have more than a vested interest in ensuring that whatever funding is coming in remains, in order to benefit those people.
	But I do have a problem, and it is one that I discussed with the Chancellor just before Christmas. The main delivery agency is a Lib Dem council, which fails to deliver in an impartial way in the areas of most need. It was difficult before for Government Departments to pinpoint what was happening, but now we can pinpoint that we have a council that is not doing what it ought to be doing in terms of social justice. The figures will pan out in a macro way across Liverpool and Merseyside as a whole, but it will only be by concentrating those in need in specific areas, for the purpose of political gerrymandering, in my opinion. I hope that the Government will address that.
	I sincerely believe that the Government will address the need for a long taper that will ensure that the many good projects that are going through, across Merseyside as a whole and in my own city of Liverpooland, I am sure, in Cornwall, South Yorkshire and Waleswill continue.

Peter Kilfoyle: I take on board what the hon. Gentleman says. In a grown-up world we all have to recognise that circumstances change. I recall that in an intervention I was making the point to the hon. Gentleman that government is an organic process. It is not preserved in aspic from one year to the next, as it has to cater for changing circumstances. The object of objective 1 is to enable some areas, whether in Cornwall, Merseyside or South Yorkshire, to compete on the same basis as others. Previously, those disadvantaged areas have not been able even to get into the same ring as the others.
	In the case of Merseyside, given that the taper will come in across the country as a whole, I sincerely hope that our share will enable us to carry on with the resurgence that is taking place, together with the other funding streamsI echo the comments of my hon. Friendswhich are just as important, and are coming into the area of the hon. Member for St. Ives as much as into mine. If there is real good will in objective 1 areas and a willingness to act objectively in the interests of people there, along with meaningful dialogue in the Council of Ministers, I do not believe that, even given the augmentation of the European Union with 10 accession states, there will be a problem down the line.
	We are all big and bold enough to recognise that there will be areas, perhaps like Cornwall, that will need to qualify for some time to come. Some of us, however, are hoping that the programme will be successful in achieving its aim. That is why we are positive about it; it is a damn good scheme. I ask the hon. Gentleman to bear in mind that the scheme, which was brought in under the Tories against their wishesthey did not want objective 1, and tried to frustrate ithas achieved effects that are undeniable in terms of regenerating areas and uplifting the aspirations and hopes of citizens within them.

Dave Watts: Will my right hon. Friend clarify exactly what the guarantee reflects? Many Labour Members believe that the poorer areas should be no worse off than they would have been had enlargement not taken place. We accept that resources need to go to the new areas, but we do not believe that the poorest regions should pay for enlargement. Will my hon. Friend give us some assurance about that?

Jacqui Smith: I think that I have spelled out what the guarantee would mean. It would maintain the same criteria, but in a post-enlargement environment. Of course, that relates to only a quarter of resources that come into regions from structural funds. My hon. Friend and other hon. Members who represent similar areas will continue to argue for increased investment in our regions. I simply point to the Government's record, which has been of continuous increased investment in the sorts of constituencies that hon. Members who are present represent.
	It is also important that the process engages stakeholders. We are holding an ongoing dialogue on that. As my hon. Friend the Member for Falmouth and Camborne said, and following the strong representations that she and other Cornwall Members of ParliamentI have to say that she, in particular, is on my backhave made, my hon. Friend the Economic Secretary has worked with key Cornish stakeholders, including Cornwall county council, Cornwall Enterprise and the South West of England Regional Development Agency, to discuss future arrangements and how to ensure the most effective funding deal for Cornwall. We have especially considered different funding streams and how we can use them as flexibly as possible to ensure that, as my hon. Friend rightly says, the funding gets to the areas of Cornwall where it is needed, that it is maximised most effectively and that the best use is made of it.
	Let me turn now to the Commission's proposals for reform of the funds. I can understand why hon. Members want to compare the Government's proposals with what they believe to be on offer from the Commission. The Commission's proposals were set out in its third cohesion report of February 2004 and in a package of draft structural and cohesion funds regulations for the next financial perspective, which was published in July 2004.
	The Government welcomed aspects of the Commission's approach, including its proposals to strengthen the strategic focus of EU regional policy on the Lisbon and Gothenburg agendas. However, we have serious concerns regarding aspects of the Commission's approach. First, that approach isin our view, and in the view of the majority of contributors to the budgetdependent on an unaffordable expansion in the EC budget. The Commission is advocating a major 33 per cent. real-terms increase in the structural funds budget for the next EC financial perspective. We oppose that considerable increase, but the hon. Member for St. Ives gave the impressionI do not know whether he meant tothat what we were proposing in our financial perspective negotiations was somehow a cut in the available funds. That is not the case. A 1 per cent. of EU gross national income budget in Europe is still an increase on the current financial perspective an increase, in fact, of 6.5 per cent. in real terms. So, yes, we are arguing that we need resources to go into that project. We are also arguing, however, that they should be spent in a way that adds the most value.
	Secondly, the Commission's proposals fail to focus the EU's limited resources on key priorities such as the economic development of the poorest member states. This is where the proposals fail the test of whether they are focusing in the right area because, at European level, that should be where those resources are focused. Thirdly, the Commission's proposals do not go far enough to simplify the bureaucratic arrangements for implementing programmes or to give member states, their nations and their regions greater flexibility to deliver programmes that genuinely reflect local needs.
	The hon. Members for St. Ives and for Montgomeryshire, and my hon. Friend the Member for Knowsley, North and Sefton, East rightly mentioned the range of Government programmes and initiatives, but argued that in some cases they were too fragmented and bureaucratic. I have some sympathy with that argument, and the Government are currently working on ways of ensuring that those many different funding streams can be more coherently brought together in the regions.
	However, when we talk about bureaucracy and difficulty, it is usually the EU structural funds programmes that are the villains of the piece. In 2003, the Government commissioned an independent study by Ecotec Consulting on the added value of structural funds programmes in the UK, which reported that the administrative processes for delivering structural funds programmes were widely described as a burden and as more resource-intensive than domestic programmes. Of course, one of the things that causes fragmentation in objective 1 regions is the distinction between whether the money is coming through a structural funds routewith all the administration that that involvesor through a domestic route. The domestic route might also involve administration and bureaucracy, but what we have set up by sending the money through both the European and domestic routes is an additional fragmentation, and our proposals would help to overcome that in regard to the delivery of programmes and funding.

Andrew George: Does the Minister accept that a large number of EU member states that enjoy objective 1 status bring together both nation state and EU funding programmes in the form of a one-stop shop, involving one place of entry and one application form? They bring the administration together so that the people involved who have to interface with the process are not faced with complexity and bureaucracy. It has therefore been possible for a large number of European states to overcome the kind of bureaucratic difficulties that the Minister has described.

Jacqui Smith: But the argument comes back to whether we want to see contributions being recycled from richer member states back down to richer member states, through Europe, or whether we want to focus domestic resources on regional policy. That is part of the fundamental difference that we have.
	In contrast to the Commission's proposals, the Government's guarantee represents a firm commitment, if our approach to reform is adopted, to increase resources for regional policy in the UK for the whole of the next structural funds cycle. We therefore believe that the guarantee offers far more certainty for current objective 1 regions than the Commission's unrealistic and unsustainable approach.
	Fundamentally, I want to underline again this Government's determination to tackle persistent regional disparities within the UK and to negotiate a successful outcome to the negotiations on reform of the structural funds. We are convinced that our reform proposals, and perhaps even more importantly our proven commitment to regional policy, will ensure the best deal for the UK's nations and regions. We will set EU regional policy on a sustainable footing. We will ensure genuine solidarity between member states. We will also ensure prosperity and continued economic growth in the constituencies of hon. Members represented here today.
	Question put and agreed to.
	Adjourned accordingly at twenty-nine minutes past Seven o'clock.